Optimal Ordering and Advertisement Policies for a Two-Warehouse Inventory System with Advance Sales and Product Return Guarantee

10.6186/IJIMS.202303_34(1).0004

Mei-Chuan Cheng；Chien-Hsiu Huang；Hsiu-Feng Yen

Inventory ； Advance sales ； Appreciation period ； Advertisement ； Return products

International Journal of Information and Management Sciences

34卷1期（2023 / 03 / 01）

65 - 78

英文

In the real market, competition is becoming more intense. Companies must create customer value. They must also clearly and persuasively communicate that value to target customers. In practice, advertisement plays a key role in stimulating demand. This research incorporates the frequency of advertisement into the demand function. In order to develop and maintain a competitive advantage, the retailer offers an appreciation period in which customers can ask to return products for any reason. In addition, by providing advance sales, retailers extend the sales period and increase market share. In this article, we provide optimal ordering and advertisement policies for a two-warehouse inventory system with advance sales and product return guarantee. We first establish a proper model and then provide an easy-to-use method to obtain optimal ordering and advertisement policies for the retailer to achieve maximum total profit. Finally, numerical examples are given to illustrate the solution procedure, followed by a sensitivity analysis that examines the effect on the optimal solution of changes in the values of certain parameters.

1. Cheng, M. C.,Ouyang, L. Y.(2014).Advance Sales System with Price-Dependent Demand and an Appreciation Period Under Trade Credit.International Conference in Management Sciences and Decision Making, Special issue
   連結：
2. Chandra, S. A.(2020).Two warehouse inventory model for deteriorating items with stock dependent demand under permissible delay in payment.Journal of Mathematical and Computational Science,10,1131-1149.
3. Chen, M. L.,Cheng, M. C.(2011).Optimal order quantity under advance sales and permissible delays in payments.African Journal of Business Management,5,7325-7334.
4. Cheng, M. C.,Hsieh, T. P.,Lee, H. M.,Ouyang, L. Y.(2017).Optimal ordering policies for deteriorating items with a return period and price-dependent demand under two-phase advance sales.Operational Research An International Journal
5. Duary, A.,Das, S.,Arif, M. G.,Abualnaja, K. M.,Khan, M. A. A.,Zakarya, M.,Shaikh, A. A.(2022).Advance and delay in payments with the price-discount inventory model for deteriorating items under capacity constraint and partially backlogged shortage.Alexandria Engineering Journal,61,1735-1745.
6. Dye, C. Y.,Hsieh, T. P.(2013).Joint pricing and ordering policy for an advance booking system with partial order cancellations.Applied Mathematical Modelling,37,3645-3659.
7. Dye, C. Y.,Ouyang, L. Y.,Hsieh, T. P.(2007).Deterministic inventory model for deteriorating items with capacity constraint and time-proportional backlogging rate.European Journal of Operational Research,178,789-807.
8. Hsieh, T. P.,Dye, C. Y.,Ouyang, L. Y.(2008).Determining optimal lot size for a two-warehouse system with deterioration and shortages using net present value.European Journal of Operational Research,191,180-190.
9. Kocabıyıkoğlu, A.,Popescu, I.(2011).An elasticity approach to the newsvendor with pricesensitive demand.Operations research,59,301-312.
10. Kulkarnia, S.,Ponnaiyanb, S.,Tarakcia, H.(2015).Optimal ordering decisions under two returns policies.International Journal of Production Research,53,3720-3734.
11. Li, Y.,Xu, L.,Li, D.(2013).Examining relationships between the return policy, product quality, and pricing strategy in online direct selling.International Journal of Production Economics,144,451-460.
12. Liao, J. J.,Chung, K. J.,Huang, K. N.(2013).A deterministic inventory model for deteriorating items with two warehouses and trade credit in a supply chain system.Int. J. Production Economics,146,557-565.
13. Liao, J. J.,Huang, K. N.,Ting, P. S.(2014).Optimal strategy of deteriorating items with capacity constraints under two-levels of trade credit policy.Applied Mathematics and Computation,233,647-658.
14. Liu, Y.,Chen, N.(2021).Dynamic pricing with money-back guarantees.Production and Operations management
15. Manna, A. K.,Dey, K. J.,Mondal, S. K.(2017).Imperfect production inventory model with production rate dependent defective rate and advertisement dependent demand.Computers and Industrial Engineering,104,9-22.
16. Meenua, K. K.(2021).Inventory policy for deteriorating items with two- warehouse and effect of carbon emission.Reliability: Theory and Applications,16,156-165.
17. Ouyang, L. Y.,Ho, C. H.,Yang,Su, C. H.,Yang, C. T.(2015).An integrated inventory model with capacity constraint and order-size dependent trade credit.Computers and Industrial Engineering,84,133-143.
18. Panda, G. C.,Khan, M. A. A.,Shaikh, A. A.(2019).A credit policy approach in a two-warehouse inventory model for deteriorating items with price- and stock-dependent demand under partial back-logging.Journal of Industrial Engineering International,15,147-170.
19. Rabbani, M.,Zia, N. P.,Rafiei, H.(2017).Joint optimal inventory, dynamic pricing and advertisement policies for non-instantaneous deteriorating items.Operations Research,51,1251-1267.
20. Rabbanil, M.,Zia, N. P.,Rafiei, H.(2015).Coordinated replenishment and marketing policies for non-instantaneous stock deterioration problem.Computers and Industrial Engineering,88,49-62.
21. Sana, S. S.(2010).Demand influenced by enterprises’ initiatives - A multi-item EOQ model of deteriorating and ameliorating items.Mathematical and Computer Modelling,52,284-302.
22. San-José, L. A.,Sicilia, J.,Abdul-Jalbar, B.(2021).Optimal policy for an inventory system with demand dependent on price, time and frequency of advertisement.Computers and Operations Research,128
23. Sanni, S.,Jovanoski, Z.,Sidhu, H.S.(2020).An economic order quantity model with reverse logistics program.Operations Research Perspectives,7
24. Seref, M. M. H.,Seref, O.,Alptekinoglu, A.,Erengüç, S. S.(2016).Advance selling to strategic consumers.Comput. Manag. Sci.,13,597-626.
25. Shaikh, A. A.,Bhunia, A. K.,Tiwar, S.(2019).An inventory model of a three parameter Weibull distributed deteriorating item with variable demand dependent on price and frequency of advertisement under trade credit.Operations Research,53,903-916.
26. Taleizadeha, A. A.,Noori-daryana, M.,Govindanb, K.(2016).Pricing and ordering decisions of two competing supply chains with different composite policies: a Stackelberg game-theoretic.International Journal of Production Research,54,2807-2836.
27. Tsao, Y. C.(2009).Retailer’s optimal ordering and discounting policies under advance sales discount and trade credits.Computers and Industrial Engineering,56,208-215.
28. Ülkü, M. A.,Gürler, Ü.(2018).The impact of abusing return policies: A newsvendor model with opportunistic consumers.International Journal of Production Economics,203,124-133.
29. Wang, S. P.,Lee, W.,Chang, C. Y.(2012).Modeling the consignment inventory for a deteriorating item while the buyer has warehouse capacity constraint.Int. J. Production Economics,138,284-292.
30. Yadav, D.,Singh, S. R.,Kumari, R.(2012).Effect of demand boosting policy on optimal inventory policy for imperfect lot size with backorder in fuzzy environment.Control and Cybernetics,41,191-212.
31. Yang, H. L.(2004).Two warehouse inventory model for deteriorating items with shortages under inflation.European Journal of Operation Research,157,344-356.
32. Youjun, Z.,Yan, Z.,Liang, C.(2015).An inventory model with advance sales and demand rate dependent on price.12th International Conference on Service Systems and Service Management (ICSSSM)