Ordering policies for deteriorating imperfect quality items with trade-credit financing under learning effect

Mahesh Kumar Jayaswal, Mandeep Mittal () and Isha Sangal
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Mahesh Kumar Jayaswal: Banasthali Vidyapith
Mandeep Mittal: Amity University Noid
Isha Sangal: Banasthali Vidyapith

International Journal of System Assurance Engineering and Management, 2021, vol. 12, issue 1, No 13, 112-125

Abstract: Abstract In obedience with the economic order quantity model, the ordered lot has 100% good quality items, but this is only suppositional. On examination, it is learnt that some of the produced lots have defective items because of process retrogression and other such factors. Thus, in this situation, the inspection of lots is essential for all organizations when the items are deteriorating in nature. Owing to this fact, an inventory model is proposed for deteriorating items with in-process inspection with learning effect under permissible delay in the payments. The aim of this paper is to study the impact of learning on the ordered quantity under the influence of trade-credit financing. Finally, the expected total profit function is maximized with respect to order quantity under credit financing. This paper, which is an extension of Patro et al. (Int J Manag Decis Mak 17(2): 171–198, 2018) commendable work, makes significant use of permissible delay in payment and proposed an inventory model for deteriorating imperfect quality items with learning effect. A numerical example given ahead shows the verification of results. Results suggest that impact of trade-credit policy is positive on the proposed inventory model. The effect of key parameters on the model is studied by sensitivity analysis to deduce managerial insights.

Keywords: Inspection; Learning impact; Deterioration; Defective quality item; Credit financing policy (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s13198-020-01038-y

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