Title: Credit financing for deteriorating imperfect-quality items under inflationary conditions

Authors: Chandra K. Jaggi; Aditi Khanna; Mandeep Mittal

Addresses: Department of Operational Research, Faculty of Mathematical Sciences, New Academic Block, University of Delhi, Delhi 110007, India. ' Department of Operational Research, Faculty of Mathematical Sciences, New Academic Block, University of Delhi, Delhi 110007, India. ' Amity School of Engineering & Technology, 580 Delhi Palam Vihar Road, Bijwasan, New Delhi 110061, India

Abstract: In today's technology-driven world, despite of efficient planning of manufacturing system and emergence of sophisticated production methods and control systems; the items produced have some fraction of defectives. However, these defective items can be removed from the lot through a screening process. Thus, the inspection of lot becomes essential, especially when items are deteriorating in nature. Further, in today's uncertain global economy, due to rising inflation there is a consequent decline in the real value of money, which eventually forces the supplier to provide an attractive trade-credit policy to the retailer. Keeping this scenario in mind, an attempt has been made to formulate an inventory policy for a retailer dealing with imperfect quality items of deteriorating nature under inflation and permissible delay in payments. Results have been demonstrated with the help of a numerical example and sensitivity analysis is also presented to provide managerial insights into practice.

Keywords: inventory policy; imperfect items; credit financing; deteriorating items; inflation; trade credit.

DOI: 10.1504/IJSOI.2011.045560

International Journal of Services Operations and Informatics, 2011 Vol.6 No.4, pp.292 - 309

Received: 07 Jun 2011
Accepted: 25 Oct 2011
Published online: 13 Mar 2015 *

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