It is observed that large piles of consumer goods displayed in supermarkets lead consumers to buy more, which generates more profit to sellers. But a large number of on-hand display of stock leaves a negative impression on the buyer. Also, the amount of shelf or display space is limited. Due to this reason, we impose a restriction on the number of on-hand display of stock and also on initial and ending on-hand stock levels. | Yugoslav Journal of Operations Research 22 (2012), Number 1, 19-30 DOI: AN EPLS MODEL FOR A VARIABLE PRODUCTION RATE WITH STOCK-PRICE SENSITIVE DEMAND AND DETERIORATION T. ROY Department of Mathematics Vidyasagar College for Women Kolkata, India tapankabi@ K. S. CHAUDHURI Department of Mathematics Jadavpur University, Kolkata, India chaudhuriks@ Received: July 2008 / Accepted: December 2011 Abstract: It is observed that large piles of consumer goods displayed in supermarkets lead consumers to buy more, which generates more profit to sellers. But a large number of on-hand display of stock leaves a negative impression on the buyer. Also, the amount of shelf or display space is limited. Due to this reason, we impose a restriction on the number of on-hand display of stock and also on initial and ending on-hand stock levels. We introduce an economic production lot size model, where production rate depends on stock and selling price per unit. A constant fraction deterioration rate is considered in this model. To illustrate the results of the model, four numerical examples are established. Sensitivity analysis of the changes of parameter values is also given. Keywords: Inventory, lot size, deterioration, pricing, stock-dependent demand. MSC: 90B05 20 T. Roy, . Chaudhuri / An EPLS Model for a Variable Production Rate 1. INTRODUCTION We observe that the demand is usually influenced by the amount of stock displayed in the shelves in supermarkets. ., the demand rate increases or decreases according to the on-hand inventory level increase or decrease. An increase in shelf space for a particular item attracts the consumers to buy it more. On the other hand, low stock level of certain goods might raise the impression that they are not being fresh. It is a common belief that large piles of goods displayed in supermarkets tempt consumers to buy more. Therefore, the demand rate may be influenced by the stock level; such .
