An Optimal Pricing and Ordering Policy with Trapezoidal-Type Demand Under Partial Backlogged Shortages

Abstract

Based on the retail inventory operation of Heilan Home, this study incorporates the price factor into inventory environment involving trapezoidal time-varying products. A joint pricing and ordering issue with deteriorating items under partial backlogged shortages is firstly explored in a fixed selling cycle. The corresponding optimization model aiming at maximizing profit performance of inventory system is developed, the theoretical analysis of solving the model is further provided, and the modelling frame generalizes some inventory models in the existing studies. Then, a solving algorithm for the model is designed to determine the optimal price, initial ordering quantity, shortage time point, and the maximum inventory level. Finally, numerical examples are presented to illustrate the model, and the results show the robustness of the proposed model.