An EPLS model for a variable production rate with stock-price sensitive demand and deterioration
DOI:
https://doi.org/10.2298/YJOR080709003RKeywords:
inventory, lot size, deterioration, pricing, stock-dependent demandAbstract
It is observed that large piles of consumer goods displayed in supermarkets lead consumers to buy more, which generates more profit to sellers. But a large number of on-hand display of stock leaves a negative impression on the buyer. Also, the amount of shelf or display space is limited. Due to this reason, we impose a restriction on the number of on-hand display of stock and also on initial and ending on-hand stock levels. We introduce an economic production lot size model, where production rate depends on stock and selling price per unit. A constant fraction deterioration rate is considered in this model. To illustrate the results of the model, four numerical examples are established. Sensitivity analysis of the changes of parameter values is also given.References
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