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Inventory models for joint pricing and greening effort decisions with discounts

Inventory models for joint pricing and greening effort decisions with discounts PurposeThis paper aims to develop efficient decision support tools for a firm’s environment protection by using greening effort while yet improving profitability by utilizing pricing and inventory decisions with discount consideration.Design/methodology/approachThis study proposed a mathematical model for price- and greening effort-dependent demand rate with discount considerations. Later, the mathematical model is extended to the situation in which the demand rate is also dependent on the stock level, in addition to the price and greening effort. Efficient solution methodologies are developed for finding the optimal solution to the proposed models.FindingsSimple yet elegant models are proposed to mimic real-life applications. Structural properties of the models are explored to outline efficient algorithms with quantity discounts.Research limitations/implicationsThe paper considers monopoly and assumes deterministic demand. Only a more commonly observed all-units discount scheme is studied.Practical implicationsThe models provide decision support tools for firms in pursuit of joint profit maximization and environment consciousness goals.Social implicationsThe study develops environment-friendly approaches for inventory management and improving the profitability alike.Originality/valueThis study is among the first to consider environmental protection with an investment in greening effort along with inventory management and pricing decision. The study also explored the effect of all-unit quantity discounts. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Modelling in Management Emerald Publishing

Inventory models for joint pricing and greening effort decisions with discounts

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References (67)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1746-5664
DOI
10.1108/JM2-07-2016-0060
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to develop efficient decision support tools for a firm’s environment protection by using greening effort while yet improving profitability by utilizing pricing and inventory decisions with discount consideration.Design/methodology/approachThis study proposed a mathematical model for price- and greening effort-dependent demand rate with discount considerations. Later, the mathematical model is extended to the situation in which the demand rate is also dependent on the stock level, in addition to the price and greening effort. Efficient solution methodologies are developed for finding the optimal solution to the proposed models.FindingsSimple yet elegant models are proposed to mimic real-life applications. Structural properties of the models are explored to outline efficient algorithms with quantity discounts.Research limitations/implicationsThe paper considers monopoly and assumes deterministic demand. Only a more commonly observed all-units discount scheme is studied.Practical implicationsThe models provide decision support tools for firms in pursuit of joint profit maximization and environment consciousness goals.Social implicationsThe study develops environment-friendly approaches for inventory management and improving the profitability alike.Originality/valueThis study is among the first to consider environmental protection with an investment in greening effort along with inventory management and pricing decision. The study also explored the effect of all-unit quantity discounts.

Journal

Journal of Modelling in Management – Emerald Publishing

Published: Feb 12, 2018

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