This study deals with an economic order quantity model to find out the optimal selling price and optimal ordering quantity for the products which deteriorates over time. The demand for the products depends on available stock level and selling price of the products. The shortages are allowed, and it is assumed that the occurring shortages are partially backlogged. Depending on the rate of backlogging two models are presented in this study. The first model assumes a constant rate of backlogging, while in second model the backlogging rate is assumed to be dependent on waiting time. Numerical example and sensitivity analysis are presented to illustrate the results of the proposed model.

The objective of this study is to develop of an inventory policy for deteriorating items, in which demand for the products is stock dependent and the retailer invests in preservation technology to reduce the rate of product deterioration. In many real-life situations, for certain types of consumer goods, the consumption rate is sometimes influenced by the stock-level. It is usually observed that a large pile of goods on a shelf in a supermarket will lead the customer to buy more and then generate higher demand. The consumption rate may go up or down with the on-hand stock level. This paper is developed with the realistic conditions of demand, allowable credit period, partial backlogging and variable ordering cost. A solution procedure is given to find the optimal preservation technology cost and total cost of the system. A numerical example and sensitivity analysis are presented to illustrate the model.