Price-to-Quality Ratio Dependent Demand: Keeping the Intensity of Demand Constant

We consider a deterministic model of an inventory system that consists of a single type of perishable product, which is periodically replenished, and a demand depends on price-to-quality ratio (PQR). The product quality decays linearly over time. To keep an intensity of the demand constant we change the price proportionally to the decreasing quality of the product. Exponential and linear dependences of the demand's intensity of PQR are considered and optimal values of lot size and PQR maximizing the profit per unit time are obtained.