AN EOQ MODEL FOR PROGRESSIVE PAYMENT SCHEME UNDER DCF APPROACH

Hardik Soni (), Ajay S. Gor () and Nita H. Shah ()
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Hardik Soni: Chimanbhai Patel Post Graduate Institute of Computer Applications, Gujarat University, Ahmedabad-51, Gujarat, India
Ajay S. Gor: Pramukh Swami Science and H. D. Patel Arts College, Kadi, India
Nita H. Shah: Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India

Asia-Pacific Journal of Operational Research (APJOR), 2006, vol. 23, issue 04, 509-524

Abstract: An attempt is made to formulate optimal ordering policies for the retailer when the supplier offers progressive credit periods to settle the account. We define progressive credit periods as follows: If the retailer settles the outstanding amount byM, the supplier does not charge any interest. If the retailer pays afterMbut beforeN(M Ic1). The objective function to be optimized is considered as present value of all future cash-out-flows. An algorithm is given to find the flow of optimal ordering policy. Analytic proofs are discussed to study the effect of various parameters on an objective function.

Keywords: EOQ; progressive credit period; discounted-cash-flow (DCF) approach (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0217595906001017

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