Inventory Policy for a Deteriorating Item with Time-Varying Demand Under Trade Credit and Inflation

Wang Luqi (), Chen Zhijian, Chen Mingyao and Zhang Ruijie
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Wang Luqi: South China University of Technology, Guangzhou, 510640, China
Chen Zhijian: China Tower Co., Harbin, 151000, China
Chen Mingyao: China Tower Co., Harbin, 151000, China
Zhang Ruijie: South China University of Technology, Guangzhou, 510640, China

Journal of Systems Science and Information, 2019, vol. 7, issue 2, 115-133

Abstract: It’s often the case that the supplier will provide the retailer with a permissible delay period in payments, during which the supplier charges the retailer no interest and the retailer accumulates interest earned from investment return. As a type of price reduction and an alternative to price discount, trade credit helps the supplier encourage the retailer’s ordering. This paper develops an inventory replenishment model for a deteriorating item with time-varying demand and shortages, taking account of trade credit and time value of money under inflation over a finite time horizon. This model is an extension and development of the existing studies related to the inventory system considering trade credit and time value of money and offers a more general model with more flexibility and resilience to handle the situation where demand of the end market is non-decreasing with regard to time.

Keywords: inventory; deteriorating items; time-varying demand; trade credit; inflation (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:jossai:v:7:y:2019:i:2:p:115-133:n:2

DOI: 10.21078/JSSI-2019-115-19

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