Profit Maximizing Probabilistic Inventory Model under Trade Credit

Sarbjit Oberoi ()

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 4, 408-410

Abstract: In the classical EOQ models it has been considered that demand is deterministic but in many practical situations it is not possible to have a fixed demand. This study discusses the more realistic overview of demand, as in realistic situation having dependent demand is difficult; it is possible only if you're supplying sub-assembly parts on contract basis. Therefore, this study considers stochastic demand. Here maximum demand is dependent on average yearly demand and prescribed demand function. Thus initial inventory level is taken to be maximum demand derived with the help of demand function and average demand. Demand pattern considered in this model was proposed by Naddor (1966) in his book inventory systems with various realistic factors. The realistic factors considered are selling price is always greater than cost price, permissible delay in payments and even the optimality of profit equation has been checked. This study proves by optimality conditions that the profit maximization equations derived in this model help to maximize profit

Keywords: Probabilistic Demand; Trade Credit; Optimality; Convexity (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/4929/pdf (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/4929/pdf (text/html)

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:eco:journ1:2017-04-49

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijefi

Access Statistics for this article

More articles in International Journal of Economics and Financial Issues from International Journal of Economics and Financial Issues
Bibliographic data for series maintained by Monica Sinhat ().