An EOQ model for deteriorating items under supplier credits when demand is stock dependent
DOI:
https://doi.org/10.2298/YJOR1001145SKeywords:
deterioration, salvage value, cash discount, trade credit, stock dependent demandAbstract
In many circumstances retailer is not able to settle the account as soon as items are received. In that scenario supplier can offer two promotional schemes namely cash discount and /or a permissible delay to the customer. In this study, an EOQ model is developed when units in inventory deteriorate at a constant rate and demand is stock dependent. The salvage value is associated to deteriorated units. An algorithm is given to find the optimal solution. The sensitivity analysis is carried out to analyze the effect of critical parameters on optimal solution.References
Aggarwal, S.P., Jaggi, C.K. (1995) Ordering policies of deteriorating items under permissible delay in payments. Journal of the Operational Research Society, 46, 658-662
Arcelus, F.J., Srinivasan, G. (1993) Delay of payments for extra ordinary purchases. Journal of the Operational Research Society, 44 785-795
Arcelus, F.J., Srinivasan, G. (1995) 'Discount strategies for one-time-only sales. IIE Transactions, 27, 618 - 624
Arcelus, F.J., Srinivasan, G. (2001) Alternate financial incentives to regular credit/price discounts for extraordinary purchases. International Transactions in Operational Research, 8(6): 739
Brigham, E.F. (1995) Fundamentals of financial management. Chicago, itd: Dryden Press
Chu, P., Chung, K.J., Lan, S.P. (1998) Economic order quantity of deteriorating items under permissible delay in payments. Computers and Operations Research, 25, 817-824
Chung, K. (1998) A theorem on the determination of economic order quantity under conditions of permissible delay in payments. Computers and Operations Research, 25, 49-52
Shah, N. H. (1997) Probabilistic order level system with lead time when delay in payments are permissible. Top, 5(2): 297
Shah, N.H. (1993) A probabilistic order level system when delay in payment is permissible. Journal of Korean OR / MS Society (Korea), 18 175-182
Shah, N.H., Shah, Y.K. (1993) A lot size model for exponentially decaying inventory when delay in payments is permissible. Cahiers du CERO, Vol. 35, No. 1, 1-9
Soni, H., Shah, N.H. (2008) Optimal ordering policy for stock-dependent demand under progressive payment scheme. European J. Oper. Res., 184(1): 91
Teng, J.T. (2002) On the economic order quantity under conditions of permissible delay in payments. J Oper Res Soc, 53, 915-918
Downloads
Published
Issue
Section
License
Copyright (c) YUJOR
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
