An inventory model with price and trade credit demand for deteriorating items with shortages and preservation technology

In an increasingly competitive market, businesses employ various pricing strategies to enhance sales and profitability. Maintaining accurate payments is essential for ensuring cash flow stability and liquidity management. Producers and retailers must establish mutually agreed payment terms to facilitate transactions. To mitigate product deterioration, investment in preservation technology is necessary, particularly in an inflationary environment. The demand function depends on both the selling price and credit period, with shortages managed through complete back-order. Considering the above issue, the prime objective of the present investigation is to optimize preservation technology and pricing strategies to maximize total profit considering a trade-credit policy under inflationary environments. Numerical examples have been served to carry out the sensitivity analysis, highlighting the role of preservation technology in reducing deterioration losses. A comparative study has been performed and significant outcomes of the investigations are reported.