Title: Inventory lot-size policies for deteriorating items with expiration dates, advance payments and shortages under trade credit

Authors: R. Uthayakumar; S. Tharani

Addresses: Department of Mathematics, The Gandhigram Rural Institute, Deemed University, Gandhigram, Tamilnadu, India ' Department of Mathematics, The Gandhigram Rural Institute, Deemed University, Gandhigram, Tamilnadu, India

Abstract: For deteriorating items with seasonal demand, it is assumed that the payment will be made to the supplier in three consignments such as a fraction of acquisition cost is prepaid and the remaining cost is divided into two payments. This paper provides a better bound for both vendor and buyer and also more beneficial for both retailer and buyer which do not concern the status of the member. The model is derived under three different circumstances depending on the time of occurrence of shortages, credit period and cycle time. We then characterise the optimal replenishment cycle time and optimal total cost by providing the theorem and lemmas. Finally we run numerical examples to illustrate the problem and provide some managerial insights.

Keywords: inventory; prepayments; trade credit; maximum lifetime.

DOI: 10.1504/IJSOM.2019.102034

International Journal of Services and Operations Management, 2019 Vol.34 No.1, pp.111 - 140

Received: 12 Mar 2017
Accepted: 23 Jul 2017
Published online: 04 Sep 2019 *

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