Optimal Inventory Policy for Deteriorating Items with Seasonal Demand under the Effect of Price Discounting on Lost Sales

In this paper an inventory model is developed with seasonal quadratic demand and time proportional deterioration. Shortages are considered and are partially backlogged. At the start of shortage period price discount is declared on unit selling price for backordered quantity so as to enhance the demand and to reduce the lost sales which in turn maximizes the total profit per unit time. Numerical illustration and sensitivity analysis of the optimal solution with respect to various parameters is carried out to describe the model.