Joint pricing and replenishment decisions in an inventory model for deteriorating items considering wastewater treatment: A case study

Subject Areas : Inventory Control

Arash  Sepehri ¹ (Department of Logistics and Supply Chain Engineering, School of Industrial Engineering, Iran University of Science and Technology (IUST), Tehran, Iran)
Mohammad Reza  Gholamian ² (Department of Logistics and Supply Chain Engineering, School of Industrial Engineering, Iran University of Science and Technology (IUST), Tehran, Iran)

Received: 2021-12-22 Accepted : 2023-11-29 Published : 2023-03-01

Keywords: Supply Chain, Inventory control, deteriorating items, Wastewater treatment, Trade credit,

Abstract :

Wastewater treatment has been a challenge for beverage companies in recent years which has led them to establish specific units to purify the expired returning items before agricultural uses or disposal. This issue has never been studied from the perspective of inventory and production management. This paper proposes an inventory formulation in the case of Behnoush beverage company in Iran to determine the replenishment cycle and the optimal selling price of items when: (a) items deteriorate continuously and have their specific expiration dates, (b) a proportion of items that are expired are moved to the company and after the process of wastewater treatment, and (c) a trade credit period is offered to the buyer to make encouragement for ordering in larger quantities. Optimality conditions for the total cost function are elaborated. Thereafter, numerical experiments are adopted for validation. Eventually, managerial implications are outlined and findings of the study are summarized.

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