Title: Pricing model for deteriorating by considering of two items

Authors: Seyed Mohamad Mahdi Kazemi; Nasser Safaie; Ali Nazeri

Addresses: Department of Industrial Engineering, Islamic Azad University, Damavand Branch, Damavand, Iran ' Faculty of Industrial Engineering, K.N. Toosi University of Technology, No. 7, Pardis St., Mollasadra Ave., Vanak Square, 19991-43344, Tehran, Iran ' Department of Industrial Engineering, Islamic Azad University, Damavand Branch, Damavand, Iran

Abstract: The main purpose of present study is to examine a three-level supply chain that comprises a manufacturer, major distributor and retailer in which two deteriorating items are manufactured. At the manufacturer level, production planning is studied. This production takes place in such a way that it can supply the needs of the wholesaler and, at the same time, prevent the increase in the rate of deteriorating of the manufactured items. At the wholesale level, warehousing management is considered in order to minimise the waste of items in the warehouse, in addition to estimating the amount of demand received by the retailer. At retail level, demand management is examined. In this paper, demand is assumed to be a linear function of price, and naturally with increasing prices, the demand decreases. The mathematical model obtained in this research is a nonlinear mathematical optimisation problem. The results of this research are generalisations of some of the mathematical models in the subject literature.

Keywords: supply chain; deteriorating item; pricing; production management.

DOI: 10.1504/IJPM.2020.10025598

International Journal of Procurement Management, 2020 Vol.13 No.5, pp.621 - 634

Received: 04 Jan 2019
Accepted: 17 May 2019

Published online: 05 Oct 2020 *

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