An epq model with variable production rate and markdown policy for stock and sales price sensitive demand with deterioration

This article deals with an Economic Production Quantity (EPQ) model for a single type of product. It is assumed that the demand of customer is not only influenced by the stock display but also the unit selling price. The production rate varies with the demand rate of the items. Deterioration of products takes place after remaining in stock for a long time. The rate of deterioration is assumed to be constant. Price markdown is taken into consideration when deterioration of product begins. Shortage occurs at the end of the cycle. The objective of this research work is to determine the optimal values of selling price, production lot size, production run time, markdown time and price markdown to maximize the average profit function. Numerical example with graphical illustration is provided to establish the model.