Replenishment and pricing policy for deteriorating items taking into account the time-value of money

Replenishment and pricing policy for deteriorating items taking into account the time-value of money

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Article ID: iaor200261
Country: Netherlands
Volume: 71
Issue: 1/3
Start Page Number: 213
End Page Number: 220
Publication Date: Jan 2001
Journal: International Journal of Production Economics
Authors: ,
Keywords: deteriorating items
Abstract:

A deteriorating inventory model taking into account the time-value of money is developed for a deterministic inventory system with price-dependent demand. This study applies the discounted cash flows (DCF) approach for problem analysis. A heuristic approach is presented to derive the near optimal replenishment and pricing policy that tries to maximize the total net present-value profit. A numerical example is implemented to illustrate the theory.

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