Table of Contents
Journal of Industrial Engineering
Volume 2013 (2013), Article ID 793568, 7 pages
http://dx.doi.org/10.1155/2013/793568
Research Article

Optimizing Inventory and Pricing Policy for Seasonal Deteriorating Products with Preservation Technology Investment

Institute of Systems Engineering, School of Economics and Management, Southeast University, Nanjing 210096, China

Received 27 November 2012; Revised 2 February 2013; Accepted 8 March 2013

Academic Editor: Kung-Jeng Wang

Copyright © 2013 Yong He and Hongfu Huang. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The paper studies a kind of deteriorating seasonal product whose deterioration rate can be controlled by investing on the preservation efforts. In contrast to previous studies, the paper considers the seasonal and deteriorating properties simultaneously. A deteriorating inventory model is developed for this problem. We also provide a solution procedure to find the optimal decisions about the preservation technology investment, the market price, and the ordering frequency. Then a case study is used to illustrate the model and the solution procedure. Finally, sensitive analysis of the optimal solution with respect to major parameters is carried out.