Two Level Trade Credit Policy Approach in Inventory Model with Expiration Rate and Stock Dependent Demand under Nonzero Inventory and Partial Backlogged Shortages

Ali Akbar Shaikh, Leopoldo Eduardo Cárdenas-Barrón (), Amalesh Kumar Manna, Armando Céspedes-Mota and Gerardo Treviño-Garza
Additional contact information
Ali Akbar Shaikh: Department of Mathematics, The University of Burdwan, Burdwan 713104, India
Amalesh Kumar Manna: Department of Mathematics, The University of Burdwan, Burdwan 713104, India
Armando Céspedes-Mota: Tecnologico de Monterrey, School of Engineering and Sciences, Ave. Eugenio Garza Sada 2501, Monterrey 64849, NL, Mexico
Gerardo Treviño-Garza: Tecnologico de Monterrey, School of Engineering and Sciences, Ave. Eugenio Garza Sada 2501, Monterrey 64849, NL, Mexico

Sustainability, 2021, vol. 13, issue 23, 1-19

Abstract: In present real life situations, the stock and expiration date directly impact on the demand of an item. In this context, this research work develops an inventory model for stock and expiration rate-dependent demand under a two-level trade credit policy. Specifically, the following three situations are studied: (i) trade credit policy without zero ending inventory; (ii) trade credit policy with zero ending inventory; (iii) trade credit policy with partial backlogged shortages. The proposed inventory model is formulated as a non-linear constrained optimization problem. Some theoretical results are derived, and an algorithm is stated in order to solve the proposed inventory model. The main objective of the inventory model is to determine the optimal cycle length, the optimal ending inventory level, and the optimal number of units displayed which maximize the total profit. Some numerical examples are solved. Finally, a sensitivity analysis is done with the aim to see the impacts of a variation of the input parameters on the decision variables and the total profit.

Keywords: inventory; stock and expiration rate-dependent demand; partially backlogged shortage; two-level trade credit policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/23/13493/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/23/13493/ (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:gam:jsusta:v:13:y:2021:i:23:p:13493-:d:696122

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().