An Inventory Model for Deteriorating Items Having Price, Stock and Advertisement Dependent Demand under Credit Period
- 1 Department of Statistics, University of Mumbai, Mumbai, India
- 2 Department of Statistics, University of Mumbai, Mumbai, India
Abstract
Managing inventory for products that deteriorate over time is a significant challenge for retailers. This model assumes that items follow a two-parameter Weibull distribution to represent the decay rate. In practice, demand is rarely constant and is influenced by factors such as price, stock availability, advertisement efforts, and seasonal trends. By taking inspiration from these real-life situations, we developed an inventory model for deteriorating items with price, stock, and advertisement-dependent demand. The model deals with a two-level partial credit period. The primary goal of this inventory model is to evaluate the optimal selling price and optimal replenishment cycle length in order to minimize the retailer’s total cost per unit time. Numerical examples are illustrated to demonstrate the model, and sensitivity analysis highlights the impact of various parameters on the optimal solutions.
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