Research on Ordering Strategy of Perishable Products with Variable Demand

Feng Wei

doi:doi:10.11648/j.ijefm.20180603.15

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Research on Ordering Strategy of Perishable Products with Variable Demand

Feng Wei

Published in International Journal of Economics, Finance and Management Sciences (Volume 6, Issue 3)

Received: 19 June 2018 Published: 20 June 2018

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Abstract

This paper mainly considers the influence of price on demand for perishable products. According to the characteristics of products and the condition of demand, demand is a function of price elasticity. Under the premise of allowing the shortage, this study constructs optimal inventory control model of perishable products by introducing the lost order coefficient and solves the model, improves the traditional inventory model. Using optimization method, which deduces the optimal ordering cycle, the optimal order quantity and the total inventory cost, etc. Through the example for the deterioration rate and service level to sensitivity analysis, the results show that as deterioration rate increases, the total inventory cost and sale price are on the rise, while the unit profit is decreasing; The service level is directly proportional to the selling price, inversely proportional to the total inventory cost and unit profit. This research provides a theoretical basis for firms in the efficient inventory management.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 6, Issue 3)
DOI	10.11648/j.ijefm.20180603.15
Page(s)	104-109
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Perishable Products, Demand Depends on Price, Inventory Model, Sensitivity Analysis

References

[1]	Bai QG, Xu XH, Chen MY, Luo Q. A. two-echelon supply chain coordination for deteriorating item with a multi-variable continuous demand function. 1rd ed., vol. 2. International Journal of Systems Science: Operations & Logistics 2015, pp. 49-62.
[2]	Taniya S, Santanu K. An economic production quantity model for items with time proportional deterioration under permissible delay in payments. 3rd ed., vol. 5. International Journal Mathematics in Operational Research 2013, pp. 23-31.
[3]	Tal Avinadav, Avi Hebon, Uriel Spiegel. Optimal inventory policy for a perishable item with demand function sensitive to price and time. 2rd ed., vol. 144. International Journal Mathematics in Operational Research 2013, pp. 497-506.
[4]	Cetinkaya. S, Chung-Yee Le. Stock Replenishment and Shipment Scheduling for Vendor-managed Inventory Systems. 2rd ed., vol. 46. Management Science 2000, pp. 217-232.
[5]	Panda S., Modak, N. M., Snas, S. S. Pricing and replenishment policies in dual-channel supply chain under continuous unit cost decrease. vol. 256. Applied Mathematics and Computation 2015, pp. 913-929.
[6]	Zhang J. X., Wang Y., Lu L. H. Optimal dynamic pricing and replenishment cycle for non-instantaneous deteriorating items. vol. 170. International Journal of Production Economics 2015, pp. 136-145.
[7]	Jian Holmstorm, Implementing Vendor-Managed-Inventory the Efficient way: A case Study of Partnership in the Supply Chain. 3rd ed., vol. 39. Production and Inventory Management Journal 1998, pp. 1-5.
[8]	Herbon, Avi. A non-cooperative game model for managing a multiple-aged expiring inventory under consumers’heterogeneity to price and time. 6rd ed., vol. 51. Applied Mathematical Modelling 2017, pp. 38-57.
[9]	Teng, J. T., Yang, H. L. On an EOQ model for deteriorating items with time-varying demand and partial backlogging. 4rd ed., vol. 54. Journal of the Operational Research Society 2003, pp. 432-436.
[10]	Chang, C. T. An EOQ model with deteriorating items under inflation when supplier credits linked to order quantity. 3rd ed., vol. 88. International Journal of Production Economics 2004, pp. 307-316.
[11]	S. Papachristos, K. Skouri. An inventory model with deteriorating items quantity discount, pricing and time-dependent partial backlogging. 3rd ed., vol. 83. International Journal of Production Economics 2003, pp. 247-256.
[12]	L. W. G. Strijbosch, J. J. A. Moors. The impact of unknown demand parameters on (R, S)-inventory control performance. 3rd ed., vol. 162. European Journal of Operational Research 2005, pp. 805-815.
[13]	M. J. G. Dominey, R. M. Hill. Performance of approximations for compound Poisson distributed demand in the newsboy problem. 2rd ed., vol. 92. International Journal of Production Economics 2004, pp. 145-155.
[14]	Wang X, Disney S M. Mitigating variance amplification under stochastic lead-time: The proportional control approach. 1rd ed., vol. 256. European Journal of Operational Research 2017, pp. 151-162.
[15]	Jianxiong Zhang, Guowei Liu, Qiao Zhang, Zhenyu Bai. Coordinating a supply chain for deteriorating items with a revenue sharing and cooperative investment contract. vol. 56. Omega 2015, pp. 37-49.
[16]	Yi yan Qin, Jian jun Wang, Cai min Wei. Joint pricing and inventory control for fresh produce and foods with quality and physical quatity deteriorating simultaneously. vol. 152. International Journal of Production Economics 2014, pp. 42-48.

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APA Style

Feng Wei. (2018). Research on Ordering Strategy of Perishable Products with Variable Demand. International Journal of Economics, Finance and Management Sciences, 6(3), 104-109. https://doi.org/10.11648/j.ijefm.20180603.15

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ACS Style

Feng Wei. Research on Ordering Strategy of Perishable Products with Variable Demand. Int. J. Econ. Finance Manag. Sci. 2018, 6(3), 104-109. doi: 10.11648/j.ijefm.20180603.15

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AMA Style

Feng Wei. Research on Ordering Strategy of Perishable Products with Variable Demand. Int J Econ Finance Manag Sci. 2018;6(3):104-109. doi: 10.11648/j.ijefm.20180603.15

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@article{10.11648/j.ijefm.20180603.15,
  author = {Feng Wei},
  title = {Research on Ordering Strategy of Perishable Products with Variable Demand},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {6},
  number = {3},
  pages = {104-109},
  doi = {10.11648/j.ijefm.20180603.15},
  url = {https://doi.org/10.11648/j.ijefm.20180603.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20180603.15},
  abstract = {This paper mainly considers the influence of price on demand for perishable products. According to the characteristics of products and the condition of demand, demand is a function of price elasticity. Under the premise of allowing the shortage, this study constructs optimal inventory control model of perishable products by introducing the lost order coefficient and solves the model, improves the traditional inventory model. Using optimization method, which deduces the optimal ordering cycle, the optimal order quantity and the total inventory cost, etc. Through the example for the deterioration rate and service level to sensitivity analysis, the results show that as deterioration rate increases, the total inventory cost and sale price are on the rise, while the unit profit is decreasing; The service level is directly proportional to the selling price, inversely proportional to the total inventory cost and unit profit. This research provides a theoretical basis for firms in the efficient inventory management.},
 year = {2018}
}

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TY  - JOUR
T1  - Research on Ordering Strategy of Perishable Products with Variable Demand
AU  - Feng Wei
Y1  - 2018/06/20
PY  - 2018
N1  - https://doi.org/10.11648/j.ijefm.20180603.15
DO  - 10.11648/j.ijefm.20180603.15
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 104
EP  - 109
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20180603.15
AB  - This paper mainly considers the influence of price on demand for perishable products. According to the characteristics of products and the condition of demand, demand is a function of price elasticity. Under the premise of allowing the shortage, this study constructs optimal inventory control model of perishable products by introducing the lost order coefficient and solves the model, improves the traditional inventory model. Using optimization method, which deduces the optimal ordering cycle, the optimal order quantity and the total inventory cost, etc. Through the example for the deterioration rate and service level to sensitivity analysis, the results show that as deterioration rate increases, the total inventory cost and sale price are on the rise, while the unit profit is decreasing; The service level is directly proportional to the selling price, inversely proportional to the total inventory cost and unit profit. This research provides a theoretical basis for firms in the efficient inventory management.
VL  - 6
IS  - 3
ER  -

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Author Information

Feng Wei

School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, China

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APA Style

Feng Wei. (2018). Research on Ordering Strategy of Perishable Products with Variable Demand. International Journal of Economics, Finance and Management Sciences, 6(3), 104-109. https://doi.org/10.11648/j.ijefm.20180603.15

Copy | Download

ACS Style

Feng Wei. Research on Ordering Strategy of Perishable Products with Variable Demand. Int. J. Econ. Finance Manag. Sci. 2018, 6(3), 104-109. doi: 10.11648/j.ijefm.20180603.15

Copy | Download

AMA Style

Feng Wei. Research on Ordering Strategy of Perishable Products with Variable Demand. Int J Econ Finance Manag Sci. 2018;6(3):104-109. doi: 10.11648/j.ijefm.20180603.15

Copy | Download

@article{10.11648/j.ijefm.20180603.15,
  author = {Feng Wei},
  title = {Research on Ordering Strategy of Perishable Products with Variable Demand},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {6},
  number = {3},
  pages = {104-109},
  doi = {10.11648/j.ijefm.20180603.15},
  url = {https://doi.org/10.11648/j.ijefm.20180603.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20180603.15},
  abstract = {This paper mainly considers the influence of price on demand for perishable products. According to the characteristics of products and the condition of demand, demand is a function of price elasticity. Under the premise of allowing the shortage, this study constructs optimal inventory control model of perishable products by introducing the lost order coefficient and solves the model, improves the traditional inventory model. Using optimization method, which deduces the optimal ordering cycle, the optimal order quantity and the total inventory cost, etc. Through the example for the deterioration rate and service level to sensitivity analysis, the results show that as deterioration rate increases, the total inventory cost and sale price are on the rise, while the unit profit is decreasing; The service level is directly proportional to the selling price, inversely proportional to the total inventory cost and unit profit. This research provides a theoretical basis for firms in the efficient inventory management.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - Research on Ordering Strategy of Perishable Products with Variable Demand
AU  - Feng Wei
Y1  - 2018/06/20
PY  - 2018
N1  - https://doi.org/10.11648/j.ijefm.20180603.15
DO  - 10.11648/j.ijefm.20180603.15
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 104
EP  - 109
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20180603.15
AB  - This paper mainly considers the influence of price on demand for perishable products. According to the characteristics of products and the condition of demand, demand is a function of price elasticity. Under the premise of allowing the shortage, this study constructs optimal inventory control model of perishable products by introducing the lost order coefficient and solves the model, improves the traditional inventory model. Using optimization method, which deduces the optimal ordering cycle, the optimal order quantity and the total inventory cost, etc. Through the example for the deterioration rate and service level to sensitivity analysis, the results show that as deterioration rate increases, the total inventory cost and sale price are on the rise, while the unit profit is decreasing; The service level is directly proportional to the selling price, inversely proportional to the total inventory cost and unit profit. This research provides a theoretical basis for firms in the efficient inventory management.
VL  - 6
IS  - 3
ER  -

Copy | Download