Optimal discount time for seasonal products with trapezoidal type price and time sensitive demand pattern

Abstract

The trapezoidal type demand rate with respect to time allows three-phase variation, representing the growth, the steady and the decline phases of demand with respect to time commonly experienced by most seasonal products during their life cycle in the market. It is well observed that a temporary discount on selling price provides significant increment in demand rate for seasonal products. Temporary price discount is an integral part of sales promotion scheme. In this paper we investigate in which time phase a temporary discount on selling price may be given to maximize the profit per unit time. Mathematical models are developed to find some important characteristics of discount starring time. Numerical examples are provided to illustrate the results of proposed models.

Keywords:

• inventory control
• trapezoidal type demand
• discounted selling price