Ordering policy and Pricing for non-instantaneous deteriorating items with delay in payments

We present a joint pricing and ordering policy model for non-instantaneous deteriorating items with delay in payments. Shortages is allowed and partially backlogged. The major objective is to determine the optimal selling price and the optimal ordering policy simultaneously such that, the total profit is maximized. We first establish conditions that for any given selling price, optimal replenishment schedule exists and unique. Then, we show that the total profit is a concave function of price. Next, we present a simple algorithm to find the optimal solution. Finally, we solve a numerical example

Keywords:

ordering policy , pricing , non-instantaneous deteriorating items , delay in payments