International Journal of Mathematics and Mathematical Sciences
Volume 2009 (2009), Article ID 506376, 15 pages
doi:10.1155/2009/506376
Research Article

Optimal Transfer-Ordering Strategy for a Deteriorating Inventory in Declining Market

Nita H. Shah1 and Kunal T. Shukla2

1Department of Mathematics, Gujarat University, Ahmedabad 380 009, India
2JG College of Computer Application, Drive-in Road, Ahmedabad 380 054, India

Received 16 July 2009; Accepted 19 November 2009

Academic Editor: Heinrich Begehr

Copyright © 2009 Nita H. Shah and Kunal T. Shukla. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The retailer's optimal procurement quantity and the number of transfers from the warehouse to the display area are determined when demand is decreasing due to recession and items in inventory are subject to deterioration at a constant rate. The objective is to maximize the retailer's total profit per unit time. The algorithms are derived to find the optimal strategy by retailer. Numerical examples are given to illustrate the proposed model. It is observed that during recession when demand is decreasing, retailer should keep a check on transportation cost and ordering cost. The display units in the show room may attract the customer.