ECONOMIC ORDER QUANTITY UNDER CONDITIONS OF A ONE-TIME-ONLY EXTENDED PERMISSIBLE DELAY PERIOD IN PAYMENTS

Suresh Kumar Goyal and Chun-Tao Chang ()
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Suresh Kumar Goyal: Department of DS & MIS, John Molson School of Business, Concordia University, Montreal, Quebec, Canada H3G1M8, Canada
Chun-Tao Chang: Department of Statistics, Tamkang University, Tamsui, Taipei, Taiwan 25137, ROC

Asia-Pacific Journal of Operational Research (APJOR), 2008, vol. 25, issue 02, 267-277

Abstract: In today's business environment, a supplier usually offers customers a permissible delay for settling outstanding account balance for the goods supplied. However, a supplier on occasion may allow this permissible delay in payments to be more than the usual during a given specified period. In this paper, we establish an appropriate model for a customer to determine its optimal special order quantity when the supplier offers a special extended permissible delay for one time only during a specified period. We then establish two theorems for a customer to find the optimal special order quantity. Finally, several numerical examples are given to illustrate the theoretical results.

Keywords: Inventory; payment delay; special order quantity (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0217595908001675

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