Pricing decision within an inventory model for complementary and substitutable products

Ata Allah Taleizadeh, Masoumeh Sadat Babaei, Shib Sankar Sana, Biswajit Sarkar

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

A combination of substitutable and complementary products is very important for any business industry to make all-round profit from different aspects. How deterioration affects complementary products or substitutable products is discussed in this study. This study investigates the pricing and inventory decisions for complementary and substitutable items which are deteriorating in nature. Four models are analyzed where the demand of one product is dependent upon the selling price and the price of another product. This paper tries to compute the optimum prices and order quantities to optimize the total profit, which is the main aim. Theoretically, this model is solved by a classical optimization method. Numerical examples demonstrate the applicability of this model. Results conclude that the total profit is dependent on the degree of substitutability and complementarity. A sensitivity analysis of optimal solutions is given to test the stability of the proposed model.

Original languageEnglish
Article number568
JournalMathematics
Volume7
Issue number7
DOIs
Publication statusPublished - 2019 Jul 1

Fingerprint

Inventory Model
Pricing
Profit
Dependent
Complementarity
Deterioration
Model
Sensitivity Analysis
Optimization Methods
Optimal Solution
Optimise
Industry
Numerical Examples
Demonstrate

All Science Journal Classification (ASJC) codes

  • Mathematics(all)

Cite this

Taleizadeh, Ata Allah ; Babaei, Masoumeh Sadat ; Sana, Shib Sankar ; Sarkar, Biswajit. / Pricing decision within an inventory model for complementary and substitutable products. In: Mathematics. 2019 ; Vol. 7, No. 7.
@article{cea3308594c54e7ba94f9b18af67425b,
title = "Pricing decision within an inventory model for complementary and substitutable products",
abstract = "A combination of substitutable and complementary products is very important for any business industry to make all-round profit from different aspects. How deterioration affects complementary products or substitutable products is discussed in this study. This study investigates the pricing and inventory decisions for complementary and substitutable items which are deteriorating in nature. Four models are analyzed where the demand of one product is dependent upon the selling price and the price of another product. This paper tries to compute the optimum prices and order quantities to optimize the total profit, which is the main aim. Theoretically, this model is solved by a classical optimization method. Numerical examples demonstrate the applicability of this model. Results conclude that the total profit is dependent on the degree of substitutability and complementarity. A sensitivity analysis of optimal solutions is given to test the stability of the proposed model.",
author = "Taleizadeh, {Ata Allah} and Babaei, {Masoumeh Sadat} and Sana, {Shib Sankar} and Biswajit Sarkar",
year = "2019",
month = "7",
day = "1",
doi = "10.3390/math7070568",
language = "English",
volume = "7",
journal = "Mathematics",
issn = "2227-7390",
publisher = "MDPI AG",
number = "7",

}

Pricing decision within an inventory model for complementary and substitutable products. / Taleizadeh, Ata Allah; Babaei, Masoumeh Sadat; Sana, Shib Sankar; Sarkar, Biswajit.

In: Mathematics, Vol. 7, No. 7, 568, 01.07.2019.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Pricing decision within an inventory model for complementary and substitutable products

AU - Taleizadeh, Ata Allah

AU - Babaei, Masoumeh Sadat

AU - Sana, Shib Sankar

AU - Sarkar, Biswajit

PY - 2019/7/1

Y1 - 2019/7/1

N2 - A combination of substitutable and complementary products is very important for any business industry to make all-round profit from different aspects. How deterioration affects complementary products or substitutable products is discussed in this study. This study investigates the pricing and inventory decisions for complementary and substitutable items which are deteriorating in nature. Four models are analyzed where the demand of one product is dependent upon the selling price and the price of another product. This paper tries to compute the optimum prices and order quantities to optimize the total profit, which is the main aim. Theoretically, this model is solved by a classical optimization method. Numerical examples demonstrate the applicability of this model. Results conclude that the total profit is dependent on the degree of substitutability and complementarity. A sensitivity analysis of optimal solutions is given to test the stability of the proposed model.

AB - A combination of substitutable and complementary products is very important for any business industry to make all-round profit from different aspects. How deterioration affects complementary products or substitutable products is discussed in this study. This study investigates the pricing and inventory decisions for complementary and substitutable items which are deteriorating in nature. Four models are analyzed where the demand of one product is dependent upon the selling price and the price of another product. This paper tries to compute the optimum prices and order quantities to optimize the total profit, which is the main aim. Theoretically, this model is solved by a classical optimization method. Numerical examples demonstrate the applicability of this model. Results conclude that the total profit is dependent on the degree of substitutability and complementarity. A sensitivity analysis of optimal solutions is given to test the stability of the proposed model.

UR - http://www.scopus.com/inward/record.url?scp=85068848216&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85068848216&partnerID=8YFLogxK

U2 - 10.3390/math7070568

DO - 10.3390/math7070568

M3 - Article

AN - SCOPUS:85068848216

VL - 7

JO - Mathematics

JF - Mathematics

SN - 2227-7390

IS - 7

M1 - 568

ER -