Inventory model under permissible delay in payments and inflation with generalised Pareto lifetime

K. Srinivas Rao and S. Eswara Rao

International Journal of Procurement Management, 2015, vol. 8, issue 1/2, 202-226

Abstract: Inventory models play a dominant role in analysing many practical situations arising at places like, food and vegetable markets, market yards, warehouses, oil exploration industries, etc. In this paper we develop and analyse an EOQ model for deteriorating items with permissible delay in payments under inflation. Here, it is assumed that the demand is a function of both time and selling price. It is further assumed that the lifetime of commodity is random and follows a generalised Pareto distribution. Using the differential equations the instantaneous state of inventory is derived. With suitable cost considerations the total cost function, net profit rate function are obtained. By maximising the net profit rate function the optimal ordering quantity and optimal selling price are derived. The sensitivity of the model with respect to the costs and parameters is studied. It is observed that this model includes several of the earlier models as particular cases for specific values of the parameters.

Keywords: generalised Pareto lifetime; permissible delays; purchasing power; time; optimal selling price; payments; inflation; EOQ; inventory modelling; economic order quantity; deteriorating items; perishable goods; random commodity lifetime; differential equations; instantaneous states; costs; cost function; net profit rate function; optimal ordering quantity; model sensitivity; payment delay. (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=66295 (text/html)
Access to full text is restricted to subscribers.

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:ids:ijpman:v:8:y:2015:i:1/2:p:202-226

Access Statistics for this article

More articles in International Journal of Procurement Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().