Inventory Model of Deteriorating Items with Revenue Sharing on Preservation Technology Investment under Price Sensitive Stock Dependent Demand

Abstract. The objective of this research is to tackle the emerging problem of jointly determin- ing the optimal retail price, the replenishment cycle, and the cost of preservation technology investment from an integrated perspective among the supplier and the manufacturer. For this, we develop an integrated single-manufacturer single-retailer inventory model for deteriorat- ing items under revenue sharing on preservation technology investment. The propose model is develop under the contract that the manufacturer offers the retailer for a percentage of revenue sharing on preservation technology investment. The market demand is assume to be dependent on both the on-hand stock and price, and the manufacturer and the retailer are in an agreement of lot-for-lot policy. Numerical and graphical analysis is given to illustrate the model..