¹Economics and Management School, Wuhan University, Wuhan, China
²Department of Management, Huazhong University of Science and Technology, Wuhan, China
³Institute of Systems Science, Academy of Mathematics and Systems

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Abstract—An inventory model for a deteriorating item with price sensitive demand is developed under deterioration rate, which is assumed to follow weibull distribution with known parameter. In addition, we allow for multiple price changes about an item, but the number of price changes isn’t given. The purpose of this paper is to find the optimal number of price settings, the optimal dynamic prices and the order quantity that maximizes profits for firm. A solution procedure is found to determine the optimal decisions.

Index Terms—Inventory, Pricing, Deterioration, Weibull distribution.

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Cite: Wei Pan, Guowei Hua, Lean Yu, Jinlong Zhang, Gang Xie, Shouyang Wang, "Determining Optimal Selling Price, Order Size and the Number of Price Changes with Weibull Distribution Deterioration," Journal of Computers vol. 4, no. 12, pp. 1294-1300, 2009.