Optimal production time and preservation technology investment for seasonal deteriorating products with a generalised ramp-type demand (Q2073505)

Summary: A production-inventory model with price- and ramp-type time-dependent demand is developed in this paper. In view of the observation that the demand for a seasonal product initially increases with time and then becomes almost steady, and finally declines as time moves towards the end of the season, an EPQ model is considered with a generalised (two-parameter) ramp-type demand linearly dependent on sales price. The inventoried items are subject to continuous deterioration since production, and the rate of deterioration may be reduced by investing in preservation technology. The proposed model is developed under three different scenarios depending on the production time length. The optimal decisions, i.e., the optimal cycle length and preservation technology investment are obtained in each case. Certain conditions are derived to identify situations where the retailer should or should not invest in preservation technology. The proposed model is further illustrated numerically, and sensitivity analysis is carried out to investigate the impacts of key model-parameters on optimal decisions.