Abstract—This study investigates the supply chain inventory
problems when the supply price increases and market demand
rate depends on retail price. The purpose of this study will be to
determine optimal special order quantity, retail price and
production cycle by maximizing the increment of joint total
profit. Furthermore, due to the vendor may or not provide all
the special order quantity at the buyer’s next replenishment
date and hence the shortage will or not occur, two specific
situations are discussed in this study. A simple algorithm to find
the optimal solution is developed. Finally, several numerical
examples will be presented to demonstrate the developed model
and solution procedure to provide manager a useful decision
Index Terms—Inventory, deteriorating items, supply chain, price increase, price-dependent demand.
Chih-Te Yang is with Department of Industrial Management, Chien Hsin University of Science and Technology, Taoyuan, Taiwan (e-mail: email@example.com).
Liang-Yuh Ouyang is with the Department of Management Sciences Tamkang University, Tamsui, New Taipei, Taiwan (e-mail: liangyuh@ mail.tku.edu.tw).
Cite:Chih-Te Yang and Liang-Yuh Ouyang, "Supply Chain Inventory Problem with Price Increased and Demand Rate Depends on Retail Price," International Journal of Machine Learning and Computing vol. 3, no. 1, pp. 79-86, 2013.