OPTIMAL PRICING AND LOT-SIZE POLICIES FOR INVENTORY MODELS FOR DETERIORATIVE ITEMS WITH BERTRAND AND COURNOTS’ MODELS –IN THIRD ORDER EQUATION

Abstract

This research examines the optimal ordering and pricing of deteriorating inventory models with Bertrand-Dependent demand along with Cournot-dependent price in third order equations. Many other types of demand models, such as stock dependent, price
dependent, exponential, quadratic, linear, and constant, may be found in the academic literature. To wit, there is a lack of research
that employs a pricing strategy reliant on Bertrand demand and Cournot prices. Two models are created: The Bertrand-dependent
demand is used in the first model for both sellers, The second model implements a pricing strategy that is reliant on Cournot for both of the sellers. Both models take into account the point at which sales are profitable. In order to clarify the proposed method, mathematical models for every model are outlined, and applicable examples are presented. The price break even is presented and
the law of demand is verified. In this case, the objective of this paper is to acquire the ideal order quantities at the optimal price in
order to achieve maximum profit. For both models, we also provide a sensitivity analysis. visual basic 6.0 was used to create the
required data.