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RAIRO-Oper. Res. 55 (2021) 1799–1823

Retailer’s joint pricing model through an effective preservation strategy under a trade-credit policy

¹ Department of Mathematics, Hajee Mohammad Danesh Science and Technology University, Dinajpur 5200, Bangladesh
² Department of Industrial Engineering, Yonsei University, 50 Yonsei-ro, Sinchon-dong, Seodaemun-gu, Seoul 03722, South Korea

^* Corresponding author:bsbiswajitsarkar@gmail.com

Received:25 April 2020
Accepted:6 February 2021

Abstract

Sustainable inventory management is a common issue for any industry. This proposed study explains a representation of mathematical modelling for maintaining sustainability through the preservation technology for deteriorating products and trade-credit strategy for sustainable marketing. Based on the actual life circumstances, it is found that the demand for deteriorated products is influenced by the increasing frequency of advertising and preservation technology. The foremost aim of this study is to maintain sustainability with optimal pricing and optimal strategies to invest in preservation technology and optimal cycle length to take full advantage of the total profit. For solving the model, a classical optimization technique is utilized, and some theoretical results are shown with a graph of the profit function. Couples of experiments compare the proposed results and the existing literature and give some outcomes for different deterioration types. To illustrate and justify the model, a sensitivity analysis conceded for demonstrating the proposed model’s flexibility by changing one parameter while keeping others fixed. The result shows that the trade-credit strategy under the preservation technology makes the management’s most substantial marketing benefit.