This model incorporates realistic features that are likely to be related and
connected with special kinds of inventory. First deterioration with respect to time
is a realistic feature for at most goods. Secondly, demand rate is usually
influenced by the time. This model is very useful in the retail business. In this
study we discussed the possible effects of a temporary price discount offered by a
supplier on a retailer’s replenishment policy for deteriorating items with linear
time-dependent demand rate. By analyzing the total cost saving under special and
regular order policies, results were developed to characterize the optimal solution.
Finally, the result shows that as we increase the price discount, the total cost
saving increases. Differential calculus is used for finding optimal solution. For
finding closed form, optimal solution truncated Taylor’s series is used. From
managerial point of view, this is helpful in seasonal products. The model
presented in this study provides a basis for several possible extensions. For future
research, this model can be extended for shortages and variable ordering cost.
Another extension possible would be considering the holding cost as time
dependent or stock dependent etc.
This model incorporates realistic features that are likely to be related andconnected with special kinds of inventory. First deterioration with respect to timeis a realistic feature for at most goods. Secondly, demand rate is usuallyinfluenced by the time. This model is very useful in the retail business. In thisstudy we discussed the possible effects of a temporary price discount offered by asupplier on a retailer’s replenishment policy for deteriorating items with lineartime-dependent demand rate. By analyzing the total cost saving under special andregular order policies, results were developed to characterize the optimal solution.Finally, the result shows that as we increase the price discount, the total costsaving increases. Differential calculus is used for finding optimal solution. Forfinding closed form, optimal solution truncated Taylor’s series is used. Frommanagerial point of view, this is helpful in seasonal products. The modelpresented in this study provides a basis for several possible extensions. For futureresearch, this model can be extended for shortages and variable ordering cost.Another extension possible would be considering the holding cost as timedependent or stock dependent etc.
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