A Model with Quantity Discount, Pricing and Partial Backordering for a Deteriorating Inventory

Inventory model with quantity discount, pricing and partial backordering, although common in practice, have received very little attention from researchers. The objective of this study is to develop a deterministic inventory model with quantity discount, pricing and partial backordering when the product in stock deteriorates with time. Most retailers make pricing decisions of their products at certain times of the year and these decisions affect demand. In this study a power law form of the price dependence of demand is considered. The rate of deterioration is taken to be linear function of time. The model is solved analytically. A numerical example is given to illustrate the theory.