Pricing and ordering strategy for new product and buyback strategy for used product from retailer's point
by Dharmesh K. Katariya; Kunal T. Shukla
International Journal of Operational Research (IJOR), Vol. 50, No. 2, 2024

Abstract: Today environmental spectrums are much considered while purchasing a new product because of global awareness about sustainability of environment, hence an interest for use of restored products has increased. The retailer is a decision-maker; retailer sells a new product to the consumers and collects the used sold products for reselling. In this deteriorating inventory model, the demand rate of new products is a nonlinear function and demand rate of used buyback products is linear function of selling price and time-dependent respectively. Shortages are allowed and the unsatisfied demand is partially backlogged. The objective is to maximise total profit per time unit for a retailer concerning to optimise selling price, order quantity for a new product, and quantity of used buyback products simultaneously. Global optimality is verified by Hessian matrix method and graphically. This model is explained through a numerical example, sensitivity analysis, and managerial insights. Ultimately, some concluding remarks with future scopes are discussed.

Online publication date: Tue, 04-Jun-2024

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