Optimal Policy for Deteriorating Items with Green Technology Cost Under Price, Advertisement and Greening Level-Dependent Demand
摘要
Greener products are growing more in demand as people are becoming more concerned about the environment. Advertisement and selling price of products are also important factors which play an important role in attracting attention of customers and influencing the demand of the products in business environment. Considering all these factors, an inventory model is developed in this article for non-instantaneously degrading items. The product’s demand rate is influenced by advertisement, selling price and greening level of items. The holding cost per item per unit time is assumed to be linearly dependent on time. The purpose of this research is to find the optimal price, total cycle length and lot size which maximize the overall profit. We use Mathematica to determine the optimal solution. The result reveals that the net profit is highly sensitive to the market potential. A numerical example is solved to validate the proposed model. Sensitivity analysis is performed to study the effect of important parameters on the overall profit.