AN INTEGRATED APPROACH FOR OPTIMAL UNIT PRICE AND CREDIT PERIOD FOR DETERIORATING INVENTORY SYSTEM WHEN THE BUYER'S DEMAND IS PRICE SENSITIVE

摘要

In this paper, an attempt is made to develop the vendor - buyer integrated strategy when the buyer's demand is price sensitive, units in buyer's inventory system is subject to constant rate of deterioration and vendor may offer credit period to the buyer. The unit price charged by the vendor and the credit period offered by the vendor to the buyer are decision variables. The objective function is to maximize the buyer's and the vendor's profit. The concept of no credit is taken as a yardstick in the analysis. The computational steps are suggested for obtaining the vendor's and the buyer's decision variables under individual (non-cooperative) as well as joint (cooperative) strategies. The sensitivity analysis of the parameters is carried out using a numerical example.