Optimal Preservation Technology Investment, Retail Price and Ordering Policies for Deteriorating Items under Trended Demand and Two Level Trade Credit Financing
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This research analyzes the impact of deploying suitable preservation technology for an inventory system in which units are subject to constant rate of deterioration. The demand is considered to be function of time and retail price. It is assumed that the supplier offers a fixed credit period to the retailer and retailer also offers credit period to the customers. The goal is to maximize the total profit per unit time with respect to optimal investment to be made in preservation technology, retail price of an item and purchase quantity. The concavity of the total profit is validated using numerical example. The managerial issues are discussed.
KeywordsInventory Deterioration Price-sensitive trended demand Preservation technology investment Two-level trade credits
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