Article: A pricing and inventory control for perishable items with the inflation rate and retailer's returns Journal: International Journal of Mathematics in Operational Research (IJMOR) 2023 Vol.25 No.4 pp.548 - 569 Abstract: The impact of inflation and retail returns on perishable item joint pricing and inventory control is explored in this research, and a new model is given. The model is tested using a price and time-dependent demand function, as well as retailer's returns as a function of the selling price and order volume. The major aims of the study are to determine the optimal selling price, replenishment cycles, and order quantity all simultaneously; and to maximise the present value of the total profit over a given time horizon. Furthermore, it is displayed that the optimal replenishment cycle is unique at any price. It is then illustrated that the present value of the total profit is a concave function of price with an optimal value. Also, a simple algorithm was described for determining the optimal solution and model variables. Finally, a numerical example is used to indicate the solution algorithm, and the model's effectiveness is demonstrated by sensitivity analysis. Inderscience Publishers - linking academia, business and industry through research

Title: A pricing and inventory control for perishable items with the inflation rate and retailer's returns

Authors: Fateme Kharidar; Mostafa Kazemi; Alireza Pooya; Amir Mohammad Fakoor Saghih

Addresses: Department of Management, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran ' Department of Management, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran ' Department of Management, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran ' Department of Management, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Iran

Abstract: The impact of inflation and retail returns on perishable item joint pricing and inventory control is explored in this research, and a new model is given. The model is tested using a price and time-dependent demand function, as well as retailer's returns as a function of the selling price and order volume. The major aims of the study are to determine the optimal selling price, replenishment cycles, and order quantity all simultaneously; and to maximise the present value of the total profit over a given time horizon. Furthermore, it is displayed that the optimal replenishment cycle is unique at any price. It is then illustrated that the present value of the total profit is a concave function of price with an optimal value. Also, a simple algorithm was described for determining the optimal solution and model variables. Finally, a numerical example is used to indicate the solution algorithm, and the model's effectiveness is demonstrated by sensitivity analysis.

Keywords: pricing; inventory control; simultaneous pricing and inventory control; perishable; retailer; inflation; retailer's returns; time value of money; TVM; Iran.

DOI: 10.1504/IJMOR.2023.132840

International Journal of Mathematics in Operational Research, 2023 Vol.25 No.4, pp.548 - 569

Received: 07 Nov 2021
Accepted: 10 Jun 2022
Published online: 11 Aug 2023 *

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Title: A pricing and inventory control for perishable items with the inflation rate and retailer's returns

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