Combining the Inventory Control Policy with Pricing and Advertisement Decisions for a Non-instantaneous Deteriorating Product

Abstract

A non-instantaneous deteriorating item refers to the product that its deterioration starts after a specific period time rather than starting instantly of its arrival in stock. In this paper, we study the inventory control policy for a non-instantaneous deteriorating item subject to pricing and advertising decisions. The demand function is price- and- time-dependent and shortage is allowed and partially backlogged. The retailer aims to maximize its total profit determining the optimal selling price and inventory control variables. We formulate the proposed model and develop an algorithm to indicate the optimal solution. Finally, we extend a numerical example with discussion to show the efficiency of the proposed model.