Title: Analysis of partial trade credit financing in a supply chain by EOQ-based inventory model for exponentially deteriorating items

Authors: Gour Chandra Mahata

Addresses: Department of Mathematics, Sitananda College, P.O. + P.S. - Nandigram, District - Purba Medinipur, 721631 West Bengal, India

Abstract: In the classical inventory (or) supply chain models, it was assumed that the retailers and their customers must pay for the items as soon as the items are received. However, in practice, the supplier usually is willing to provide the retailer a full trade credit period for payments and the retailer just offers the partial trade credit period to his/her customers. This paper develops economic order quantity-based inventory model to investigate the retailer's inventory policy for deteriorating items under two levels of trade credit in a supply chain management situation as a cost minimisation problem under partial trade credit option to their customers. Mathematical theorems, lemmas and algorithms are developed to efficiently determine the optimal inventory policy for the retailer. We deduce some previously published results of other researchers as special cases. Finally, numerical examples are given to illustrate the theorems and obtain a lot of managerial phenomena.

Keywords: inventory policy; modelling; EOQ model; partial trade credit; supply chain management; SCM; deteriorating items; economic order quantity.

DOI: 10.1504/IJOR.2012.048294

International Journal of Operational Research, 2012 Vol.15 No.1, pp.94 - 124

Published online: 11 Jan 2015 *

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