Optimal ordering policy for deteriorating items under down-stream trade credit dependent quadratic demand with full up-stream trade credit and partial down-stream trade credit

Nita H. Shah, Mrudul Y. Jani and Urmila Chaudhari

International Journal of Mathematics in Operational Research, 2018, vol. 12, issue 3, 378-396

Abstract: Nowadays, the use of the offer of delay payment is a very impressive tool to boost the market demand by attracting more customers. In this paper, we propose an inventory model, in which a retailer receives a permissible delay on the entire purchase expanse from the manufacturer (i.e., an up-stream full trade credit). In comparison, the retailer asks customers to pay some percent of purchasing cost at the time of receiving the product to reduce default risk (i.e., a down-stream partial trade credit). We consider the product with maximum fixed-life time deterioration and to reduce deterioration of the product, seller spends capital on preservation technology to preserve the item. Here, down-stream trade credit dependent quadratic demand is debated which is suitable for the products whose demand increases initially and afterward it starts to decrease. Industries like fashion and electronics most probably deals with this type of demand. The objective is to minimise the total relevant cost of retailer with respect to cycle time, down-stream trade credit and investment for preservation technology. The model is supported with numerical examples. Sensitivity analysis is done to derive insights for decision-maker. Graphical results, in three dimensions, are exhibited with supervisory decisions.

Keywords: inventory; deterioration; fixed-life time; quadratic demand; preservation investment; partial down-stream trade credit; full up-stream trade credit. (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=90804 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmore:v:12:y:2018:i:3:p:378-396

Access Statistics for this article

More articles in International Journal of Mathematics in Operational Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().