Optimal strategy for determining pricing policy of a product under the influence of reworking during production

The study investigates optimal policies for determining price of the product under the influence of reworking during production. A mathematical model is proposed using optimal control theory for profit maximization, which determines the optimal pricing strategies. Moreover, we have considered reworking of imperfect items being produced during the machine shifts from in-control state to out-control state. Genetic Algorithm (GA) is employed to determine the optimum value of price. The result of the paper will be immensely beneficial for the decision makers, to identify the contribution of the selected parameters and its weightage during the entire life cycle of the product.