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: | Wee Hui-Ming, Law Sh-Tyan |
Keywords: | deteriorating items |
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.