Marketing policies on economic order quantity

Abstract

This paper studies the deterministic inventory system in which the demand rate of an item is of a polynomial function form and dependent on the inventory on hand, price policy and advertisement expenditure. We derive an efficient algorithm to determine the optimal economic order quantity, selling price, order period and advertising expenditure. Numerical examples and sensitivity analyses are also presented

Key Words:

• Inventory
• economics order quantity (EOQ)
• dependent demand rate (DDR)
• marketing policies