Optimal ordering policy under order-size dependent trade credit and complete backlogging derived algebraically

Chandan Mahato and Gour Chandra Mahata ()
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Chandan Mahato: Sidho-Kanho-Birsha University
Gour Chandra Mahata: Sidho-Kanho-Birsha University

OPSEARCH, 2023, vol. 60, issue 1, No 16, 420-444

Abstract: Abstract The retail inventory management literature generally assumes that suppliers offer their retailers a full delay in payment in order to stimulate demand. However, this may not always be offered in real-life business environments. To account for the possibility of partial delay in payment, we establish an economic order quantity (EOQ) model with allowable shortage and partial permissible delay in payment linked to order quantity. The formation of payment scheme is as follows: if the order quantity $$Q$$ Q reaches a certain level $$({Q}_{d})$$ ( Q d ) then fully permissible trade credit is possible, otherwise the partial trade credit is offered. Here, we discuss all the possible cases of the trade credit when $$Q

Keywords: Inventory; Economic order quantity; Trade credit; Arithmetic–geometric mean inequality (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s12597-022-00614-z

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