The Inventory Models for Deteriorating Items When Temporary Price Discounts Result in Increase in Demand

• Main Authors: Te-Yi Chan, 詹德意
• Other Authors: Liang-Yuh Ouyang
• Format: Others
• Language: zh-TW
• Published: 1999
• Online Access: http://ndltd.ncl.edu.tw/handle/63953144436141962674

碩士 === 淡江大學 === 管理科學學系 === 87 === In the traditional economic order quantity (EOQ) model, it is often assumed that the demand is constant. However, such assumption is usually not fulfilled in practice. The phenomenon of a price discount results in an increase in demand is very common in the market, hence the supplier may reduce its sale price temporarily to stimulate demand. When the supplier offers a price discount to a retailer temporarily, the retailer might place a large order and offers a sale to their customers to increase demand and profit. In this paper, we consider the relationship between the price and demand, and the fact that many items may deteriorate during storage, e.g., vegetables, milk and gasoline. Two models for the deteriorating items with a temporary price discount are developed for the retailer's regular replenishment time and during the retailer's sale period. The objective in this study is to maximize the difference between the profits associated with the special order and the profits for the regular ordering policy. The combination that results in the maximum profits provides the optimum price and the optimum order quantity. Numerical examples and sensitivity analysis are presented to illustrate the proposed models.