Title: Credit financing in economic ordering policies for deteriorating items with stochastic demand and promotional efforts in two-warehouse environment

Authors: Chandra K. Jaggi; Mamta Gupta; Sunil Tiwari

Addresses: Department of Operational Research, Faculty of Mathematical Sciences, New Academic Block, University of Delhi, Delhi-110007, India ' Department of Operational Research, Faculty of Mathematical Sciences, New Academic Block, University of Delhi, Delhi-110007, India ' Department of Operational Research, Faculty of Mathematical Sciences, New Academic Block, University of Delhi, Delhi-110007, India

Abstract: Retailers are nowadays focusing on promotional activities in order to attract customers because of increasing competition. Promotional efforts have significant impact on the replenishment policy and the sale price of goods. In this paper, a two warehouse inventory model is developed for deteriorating items subject to promotional efforts under permissible delay in payments. Here, a price dependent stochastic demand function is considered with partially backlogged shortages. Several realistic cases, sub cases and scenarios have been taken into account and the corresponding problems have been formulated as nonlinear constrained optimisation problems. To illustrate the proposed model two numerical examples have been solved. Further, a numerical example has been extended to perform sensitivity analysis of the model and discuss specific managerial insights.

Keywords: inventory; deterioration; partially backlogging; permissible delay in payment; price dependent stochastic demand; promotional effort.

DOI: 10.1504/IJOR.2019.101459

International Journal of Operational Research, 2019 Vol.35 No.4, pp.529 - 550

Received: 02 Aug 2016
Accepted: 08 Oct 2016
Published online: 11 Aug 2019 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article