An Economic Production Quantity Model with Flexible Production Involving Exponential and Marketing Efforts Dependent Demand
Abstract
This paper constructs economic production quantity (EPQ) model where demand is taken as
exponential function of time and promotional efforts made by the firm/sales team. Production
rate is function of demand rate. Items are considered with constant rate of deterioration. Cost of
efforts is taken as quadratic function of efforts made by firm/sales team. The objective is to find
optimal time schedule at which a firm has to stop production with optimum inventory level
which ensures maximum profit. Numerical example is presented to illustrate the theory. Impact
of marketing efforts on demand and inventory level is discussed.