An inventory model of deteriorating items with a credit period-based new demand function in a finite time horizon

Ateka Banu and Shyamal Kumar Mondal

International Journal of Operational Research, 2018, vol. 33, issue 4, 446-461

Abstract: In today's competitive market, the trade credit plays an important role to increase demands of customers/buyers. Here, we consider a two-level trade credit policy in which a delay in payment is offered by supplier to retailer and also an another delay in payment is offered by retailer to his/her all customers. In this model, it is proposed that the demand function is dependent on the length of the customer's credit period and also the duration of offering the credit period. The purpose of this model is to establish a deterministic EOQ model of deteriorating items for the retailer to maximise the total profit and the number of replenishment cycle in finite time horizon. We develop an algorithm to find out the optimal solutions. Also, the model is explained with the help of numerical examples and sensitivity analysis is given to illustrate the features of the proposed model with respect to some parameters.

Keywords: inventory; deterioration; two-level credit financing; credit period dependent demand; inflation. (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijores:v:33:y:2018:i:4:p:446-461

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