Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10347367 | Computers & Operations Research | 2005 | 12 Pages |
Abstract
Large piles of consumer goods displayed in a supermarket are often associated with on sale items to induce more sales and profits. In this paper, we first establish an economic production quantity (or EPQ) model for deteriorating items when the demand rate depends not only the on-display stock level but also the selling price per unit. In addition, we impose a ceiling on the number of on-display stocks because too much stock leaves a negative impression on the buyer and the amount of shelf/display space is limited. We then provide the necessary conditions to determine an optimal solution that maximizes profits for the EPQ model. Finally, sensitivity analysis is applied on the parameter effects of the optimal price and production run time.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Jinn-Tsair Teng, Chun-Tao Chang,