Optimal investment in preservation technology for variable demand under trade-credit and shortages

Mrudul Y. Jani, Manish R. Betheja, Urmila Chaudhari, Biswajit Sarkar

Research output: Contribution to journalArticlepeer-review

19 Citations (Scopus)


In particular business transactions, the supplier usually provides an admissible delay in settlement to its vendor to encourage further sales. Additionally, the demand for the commodity is inversely proportional to the function of the sales price, which is non-linear and, in some situations, a holding cost rises over time. Moreover, many goods often deteriorate consistently and shall not be sold after their expiration dates. This study analyses a model for perishable products with a maximum life span with price-dependent demand and trade credit by assimilating these variations and under the supposition of time-varying holding cost. Furthermore, to diminish the rate of deterioration, investment for preservation technology is often taken into account beforehand. Based on real-life circumstances, shortages are admitted and backlogged partially, with an exponential rise in wait time before the new good emerges. The key ambition is to calculate the optimum investment under preservation, sales price, and cycle time using the classical optimization algorithm to maximize the vendor’s net profit. Additionally, to clarify the outcomes, the numerical illustrations are addressed, and the sensitivity analysis of significant parameters is eventually implemented.

Original languageEnglish
Article number1301
Issue number11
Publication statusPublished - 2021 Jun 1

Bibliographical note

Publisher Copyright:
© 2021 by the authors. Licensee MDPI, Basel, Switzerland.

All Science Journal Classification (ASJC) codes

  • Computer Science (miscellaneous)
  • Mathematics(all)
  • Engineering (miscellaneous)


Dive into the research topics of 'Optimal investment in preservation technology for variable demand under trade-credit and shortages'. Together they form a unique fingerprint.

Cite this