Optimal pricing and ordering policy for an EPQ inventory system with perishable items under partial trade credit financing

Mahata, Puspita; Gupta, Arindam; Mahata, Gour Chandra

doi:10.1504/ijor.2014.064607

Cited by 6 publications

(6 citation statements)

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“…According to Amorim et al (2012), costs incurred due to damaged products are considered to achieve cost minimization of the perishable product supply chain. Researches conducted by Chen (2018), Chang et al (2015), Dye and Yang (2016), Mahata et al (2014), Mahata (2015), Chen et al (2014), Chew et al (2014), Liu et al (2015), Avinadav et al (2013), , Dalfard et al (2014) raised the issue of price determination problem in the perishable inventory model. The optimal ordering policy for perishable products with the announced price increase conditions has been developed by (Ouyang et al, 2016).…”

Section: Methodsmentioning

confidence: 99%

A Three-Phased Perishable Inventory Simulation Model with Quality Decrease Consideration

Ibrahim

Mardhiyyah

Rusdiansyah

et al. 2020

JITI

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In this article, focus on the simulation of a three-phase perishable product inventory system of a SMEs selling fresh and processed milkfish. This research was conducted to simulate a perishable product inventory system to understand and analyze the problems that occur then propose solutions to fix them. The simulation model was developed with ARENA software, simulation results of the existing condition show that there is 162 kg/month waste in fresh fish, 158 pcs/month in processed product A, and 86 pcs/month in processed product B. A model with a product renewal process mechanism was proposed to overcome this problem, and seven improvement scenarios were developed. The results obtained from the seventh improvement scenario revealed that there was a 100% reduction in fresh fish and processed product B and 94% in processed product A. Besides, there was a saving in need for fresh fish supply of 10 kg/day. In this article, we show how ARENA software can be adopted to simulate inventory system problems effectively. The method in this research can be applied to investigate various supply system scenarios and their consequences before implementing it in a real system.

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Section: Methodsmentioning

confidence: 99%

A Three-Phased Perishable Inventory Simulation Model with Quality Decrease Consideration

Ibrahim

Mardhiyyah

Rusdiansyah

et al. 2020

JITI

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“…Liao (2007) also derived a production model to determine the optimal ordering policies and bounds for the optimal cycle time under permissible delay in payments. Recently, many studies also combine EPQ model for product perishability under trade credit system such as Chen et al (2014), Mahata (2014)…”

Section: Economic Production Quantity (Epq) Model For Deteriorating Imentioning

confidence: 99%

Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme

et al. 2019

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Recently, market globalization and competition have forced companies to find alternative means to boost sales and revenue. The use of the cash flow is increasingly becoming a viable alternative for managers to improve their company's profitability in a supply chain. In today's business transactions, a supplier usually asks a manufacturer to pay via the advance-cash-credit (ACC) payment scheme if the number of goods procured is high. Additionally, product perishability has been considered in an economic production quantity (EPQ) model since it is a real phenomenon. The present work develops an EPQ model for perishable products under the ACC payment scheme. The objective of the proposed model is to determine the optimal selling price and cycle time while maximizing profit under the ACC payment scheme using a discounted cash flow analysis. A nonlinear optimization algorithm is also proposed to solve the problem. In addition, some numerical examples are employed to illustrate the solution approach and show the concavity of the present value of the total annual profit in terms of both selling price and cycle time. The numerical results show that our proposal algorithm could be applied well to solve the problems. In addition, a sensitivity analysis is conducted to obtain some managerial insights. For example, if the impact of advance payment on procurement cost is relatively smaller than that of cash payment, then it is more profitable for the manufacturer to ask for a cash payment than to receive an advance payment and vice versa.

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“…Most of the literature are concerned about pricing and inventory replenishment decision for non-deteriorating demand in single stage system. Also, there are some literature are concerned about pricing and inventory replenishment for deteriorating item in single stage inventory system, such as Saha and Basu (2010), Jaggi et al (2010), Madhavi et al (2011), Guria et al (2012), Maihami and Kamalabadi (2012), Maihami and Karimi (2014), Mahata et al (2014), Chang et al (2015). None of these studies are the integration of supplier and buyer; all of them are single echelon inventory optimisation of deteriorating items.…”

Section: Z Chenmentioning

confidence: 99%

Optimal inventory replenishment and pricing for a single-manufacturer and multi-retailer system of deteriorating items

Chen

2018

IJOR

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This paper studies an integrated optimisation model of inventory replenishment and pricing decisions in a single-manufacturer multi-retailer system of deteriorating items. Two meta-heuristic algorithms, i.e., improved particle swarm optimisation incorporated with SA mechanism (SAPSO), and a continuous domain ant colony optimisation algorithm (CDACO) are developed. Experiments show that two algorithms are effective for solving the model; however, SAPSO has higher effectiveness, efficiency and accuracy than CDACO. Sensitivity analysis shows that price elasticity coefficient significantly impacts decisions of production and retailing, giving managerial implication that reducing price fluctuation can increase profit. However, the effect of deterioration of items is not significant both for cost and profit.

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Optimal pricing and ordering policy for an EPQ inventory system with perishable items under partial trade credit financing

Cited by 6 publications

References 0 publications

A Three-Phased Perishable Inventory Simulation Model with Quality Decrease Consideration

A Three-Phased Perishable Inventory Simulation Model with Quality Decrease Consideration

Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme

Optimal inventory replenishment and pricing for a single-manufacturer and multi-retailer system of deteriorating items

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