Optimal Price, Cycle Time and Advertising for an Inventory Model of Deteriorating Items: A Geometric Programming Approach

Abstract

In recent years researchers have been interested in inventory models for deteriorating items along with determining the price of these items; given that in many real-world problems, changing the price can affect the demand level. Meanwhile, there are some other demand stimulation like advertising and discounting which can change and control the demand level of the items. In this paper, a new deteriorating inventory model was developed that considers these two demand stimulation along with pricing with multiple payments. The model has been converted and solved using geometric programming approach. Meanwhile, genetic algorithm was used as an alternative method to test the performance of GP approach. The model was implemented in real case study of food industry and numerical results and sensitivity analyses demonstrate the superiority of developed approach.