Article ID: | iaor2014574 |
Volume: | 13 |
Issue: | 2 |
Start Page Number: | 157 |
End Page Number: | 173 |
Publication Date: | May 2014 |
Journal: | International Journal of Management and Decision Making |
Authors: | Rabbani Masoud, Keyhanian Sina |
Keywords: | inventory: order policies, behaviour |
Inflation lessens the purchasing power of money generally leading to reduction in demand for purchasing products. That is also why companies may increase advertising in order to alleviate the shock. This paper considers a new customer reaction to inflation growth, namely cautious behaviour, according to which customers react differently in the beginning phases of inflation which leads to an initial demand enhancement, though following a decreasing trend after the prices reach a sufficiently unaffordable level. On the other hand, inflation growth increases demand for leasing, which is a suitable option to satisfy needs of products that are to be used only in a specific duration. New exponential functions are designed for the competition between purchasing and leasing to find the revenue of an integrated finance lease‐sales system. Sensitivity and trends of decision variables' optimal values are analysed in terms of caution coefficient and inflation vectors for different numerical examples.