Title: An inventory model with stock-dependent demand under trade-credit policy and fixed life-time
Authors: Nita H. Shah; Kavita Rabari; Ekta Patel
Addresses: Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India ' Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India ' Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India
Abstract: In inventory management, deterioration has a great impact on total profit. To develop business strategies in competitive market, stock-dependent and price-sensitive demand rate is considered to attract more customers. The holding cost and deterioration rate are time-dependent. The product considered has fixed life-time. The model considers the trade-credit policy that is the retailer will offer a certain time period to the customers to settle the account to increase the sales during the permissible period. The objective is to maximise the total cost with respect to cycle time and selling price. The classical optimisation method is used to find the optimal solution. A sensitivity analysis of optimal solutions for different inventory parameters is carried out. The managerial insights are deduced for the retailer.
Keywords: selling price; deterioration; trade-credit; stock-dependent demand; time-dependent holding cost; sensitivity.
International Journal of Procurement Management, 2021 Vol.14 No.2, pp.264 - 275
Received: 18 Nov 2019
Accepted: 16 Dec 2019
Published online: 08 Mar 2021 *