Optimal inventory control of obsolete products with price-dependent demand
Abstract
The aim of this study is to develop a profit-maximization inventory policy for retailers in products with sudden obsolescence in which the type of obsolescence is considered with exponential duration. The study was performed in a real case study of Tablet PC in which demand is assumed to be a decreasing function of the retailer's sale price; but when the obsolescence is occurred, however, the demand is dropped suddenly into zero. The mathematical model was developed based on the terms of inventory management and by considering order quantity and retailer's selling price as decision variables. The real world data has been used as numerical example and sensitivity analyses were performed on critical parameters of the model.References
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