Optimal procurement and pricing policy for deteriorating items with price and time dependent seasonal demand and permissible delay in payment Online publication date: Thu, 12-May-2022
by Ashish Sharma; Amit Kumar Saraswat
International Journal of Mathematics in Operational Research (IJMOR), Vol. 21, No. 4, 2022
Abstract: In practice, items like food, nursery plants, medicines, etc. are seasonal and deteriorating in nature. For this type of products, permissible delay in payment is a common business policy, which is used to increase in the sell volume and to develop trust in buyer-seller relationship. In this paper, we developed an inventory model for time dependent deteriorating seasonal items with the permission of delay in payment. Shortages are permitted and partially back ordered. Our aim is to find optimal selling price and ordering quantity simultaneously. Concavity of profit function with respect to decision variables has been discussed analytically. A solution procedure followed by a numerical example and sensitivity analysis along with managerial insights are provided. Numerical analysis predicts that delay in payment profit policy is a better decision in order to maximise the profit or in order to get more profit.
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