This article deals with an economic production quantity inventory model for non-instantaneous deteriorating items under inflationary conditions, permissible delay in payments, customer returns, and price- and time-dependent demand. The customer returns are assumed as a function of demand and price. The effects of time value of money are studied using the Discounted Cash Flow approach. The main objective is to determine the optimal selling price, the optimal length of the production period, and the optimal length of inventory cycle simultaneously such that the present value of total profit is maximized. An efficient algorithm is presented to find the optimal solution of the developed model. Finally, a numerical example is extracted to solve the presented inventory model using our proposed algorithm, and the effects of the customer returns, inflation, and delay in payments are also discussed.
Institution of Mechanical Engineers. Proceedings. Part B: Journal of Engineering Manufacture, 2014, Vol 228, Issue 12, p. 1653-1663