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An EOQ model for decaying item with full advanced payment and conditional discount

Shayan Tavakoli () and Ata Allah Taleizadeh ()
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Shayan Tavakoli: University of Tehran
Ata Allah Taleizadeh: University of Tehran

Annals of Operations Research, 2017, vol. 259, issue 1, 415-436

Abstract: Abstract The classic economic order quantity model assumes that purchasing cost should be paid immediately after the delivery time. In practice, sometimes the vendors ask the buyers to prepay the entire or a percentage of the purchasing cost before delivery time. In this paper the buyer’s inventory control system for a decaying item under full prepayment scheme based on various conditions consisting of (1) no shortage, (2) full backordering shortage is allowed and (3) partial lost sale is permitted, are developed. Numerical analysis is provided to show the performance of the model and some managerial insights are presented based on the proposed solution technique and sensitivity analysis.

Keywords: Inventory control; Economic order quantity; Decaying; Shortage; Full prepayment (search for similar items in EconPapers)
Date: 2017
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