Title: An inventory model with backorders under deterioration, pilferage and marketing policies

Authors: Dinesh S. Dave

Addresses: Department of Decision Sciences, College of Business, Appalachian State University, Boone, N. Carolina, 28608, USA

Abstract: In this article an order-level-lot-size inventory model is analysed under the effects of deterioration, pilferage and the influence of pricing policies where selling price is determined according to the mark-up of unit cost. The demand is assumed to be a function of price, price elasticity and the frequency of advertisement. The net profit is then estimated as a function of demand, total inventory cost including the cost of deterioration and pilferage. The optimum values of lot size, order level and the expected profit are determined. Further, a numerical example is provided to illustrate the model and an attempt is made to depict the impact of variation in marketing factors on order level, lot size, demand and expected profit.

Keywords: deterioration; pilferage; marketing policies; inventory decision making; inventory management; backorders; price mark-up; pricing policy; inventory modelling; deteriorating items; order levels; lot sizes; demand; expected profit.

DOI: 10.1504/IJCAT.1990.062698

International Journal of Computer Applications in Technology, 1990 Vol.3 No.2, pp.81 - 87

Published online: 11 Jun 2014 *

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