The optimal ordering policy of the EOQ model under trade credit depending on the ordering quantity from the DCF approach

Kun-Jen Chung and Jui-Jung Liao

European Journal of Operational Research, 2009, vol. 196, issue 2, 563-568

Abstract: This paper discusses the optimum order quantity of the EOQ model that is not only dependent on the inventory policy but also on firm' credit policy. Here, the conditions of using a discounted cash-flows (DCF) approach and trade credit depending on the quantity ordered are discussed. We consider that if the order quantity is less than at which the delay in payments is permitted, the payment for the item must be made immediately. Otherwise, the fixed trade credit period is permitted. This paper incorporates all concepts of a discounted cash-flows (DCF) approach, trade credit and the quantity ordered and develops a new inventory model to generalize Chung [Chung, K.H., 1989. Inventory control and trade credit revisited, Journal of the Operational Research Society 40, 495-498].

Keywords: Discounted; cash-flows; (DCF); Trade; credit; Inventory (search for similar items in EconPapers)
Date: 2009
References: View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:196:y:2009:i:2:p:563-568

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