A production and pricing decision for deteriorating items with time-varying and price dependent demand rate

Author

Duan, Yongrui ; Yang, Jin

Author_Institution

Sch. of Econ. & Manage., Tongji Univ., Shanghai, China

fYear

2011

fDate

8-10 Aug. 2011

Firstpage

4524

Lastpage

4527

Abstract

This paper considers the production and pricing problem for deteriorating items with time-varying and price dependent demand rate. In this production system, the production rate is finite and shortages can be backlogged in the same cycle. The demand rate is linearly dependent on time and price over a finite planning horizon. A nonlinear model to minimize the average cost is presented. The proposed nonlinear constrained problem is numerically solved by using the box complex algorithm. As a result, the optimal number of production cycles and price can be determined.

Keywords

cost reduction; pricing; production planning; average cost minimization; box complex algorithm; finite planning horizon; item deterioration; nonlinear constrained problem; nonlinear model; price dependent demand rate; pricing decision; production decision; production rate; production system; time-varying demand rate; Economics; Educational institutions; Optimization; Pricing; Production; Silicon; Silver; deteriorating items; pricing dependent demand; production and pricing; time-varying;

fLanguage

English

Publisher

ieee

Conference_Titel

Artificial Intelligence, Management Science and Electronic Commerce (AIMSEC), 2011 2nd International Conference on

Conference_Location

Deng Leng

Print_ISBN

978-1-4577-0535-9

Type

conf

DOI

10.1109/AIMSEC.2011.6011185

Filename

6011185