A profit maximization single item inventory problem considering deterioration during carrying for price dependent demand and preservation technology investment

Department of Applied Sciences, School of Engineering, Tezpur University Sonitpur, Napaam 784028, Assam, India

^* Corresponding author: bijoy91@tezu.ernet.in

Received: 18 October 2021
Accepted: 14 May 2022

Abstract

This paper addresses a single item two-level supply chain inventory model considering deterioration during carrying of deteriorating item from a supplier’s warehouse to a retailer’s warehouse as well as deterioration in the retailer’s warehouse. The model assumes preservation technology in the retailer’s warehouse to prevent the rate of deterioration. An upper limit for the preservation technology investment has been set as a constraint to the model. The model maximizes the retailer’s profit per unit time, simultaneously calculated optimal order quantity. A price dependent demand and storage-time dependent holding cost is considered to develop the model. Some theorems are proven to get optimal values of the total cost. A numerical problem is workout as per the developed algorithm and with the help of MATLAB software to study the applicability of our theoretical results.