scholarly journals An Inventory System for Deteriorating Products with Ramp-Type Demand Rate under Two-Level Trade Credit Financing

2011 ◽  
Vol 2011 ◽  
pp. 1-15 ◽  
Author(s):  
G. Darzanou ◽  
K. Skouri
Keyword(s):  
Existence And Uniqueness ◽  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Inventory System ◽  
Credit Policy ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Credit Financing ◽  
Ramp Type Demand

An inventory system for deteriorating products, with ramp-type demand rate, under two-level trade credit policy is considered. Shortages are allowed and partially backlogged. Sufficient conditions of the existence and uniqueness of the optimal replenishment policy are provided, and an algorithm, for its determination, is proposed. Numerical examples highlight the obtained results, and sensitivity analysis of the optimal solution with respect to major parameters of the system is carried out.

scholarly journals A Global Optimizing Policy for Decaying Items with Ramp-Type Demand Rate under Two-Level Trade Credit Financing Taking Account of Preservation Technology

2013 ◽  
Vol 2013 ◽  
pp. 1-12 ◽  
Author(s):  
S. R. Singh ◽  
Swati Sharma
Keyword(s):  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Credit Policy ◽  
Preservation Technology ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Credit Financing ◽  
Delay In Payments ◽  
Ramp Type Demand

An inventory system for deteriorating items, with ramp-type demand rate, under two-level trade credit policy taking account of preservation technology is considered. The objective of this study is to develop a deteriorating inventory policy when the supplier provides to the retailer a permissible delay in payments, and during this credit period, the retailer accumulates the revenue and earns interest on that revenue; also the retailer invests on the preservation technology to reduce the rate of product deterioration. Shortages are allowed and partially backlogged. Sufficient conditions of the existence and uniqueness of the optimal replenishment policy are provided, and an algorithm, for its determination, is proposed. Numerical examples draw attention to the obtained results, and the sensitivity analysis of the optimal solution with respect to leading parameters of the system is carried out.

Optimal replenishment and credit policy in an inventory model for deteriorating items under two-levels of trade credit policy when demand depends on both time and credit period involving default risk

2018 ◽  
Vol 52 (4-5) ◽  
pp. 1175-1200 ◽  
Author(s):  
Avik Mukherjee ◽  
Gour Chandra Mahata
Keyword(s):  
Default Risk ◽  
Trade Credit ◽  
Optimal Solution ◽  
Deteriorating Items ◽  
Dynamic Decision Making ◽  
Credit Policy ◽  
Credit Period ◽  
Deterioration Rate ◽  
Demand Rate ◽  
Credit Financing

In this paper, we examine an optimal dynamic decision-making problem for a retailer’s inventory system of deteriorating items under two-level trade credit financing where the supplier, as well as the retailer, offers trade credit to the subsequent downstream member, the demand rate of which varies simultaneously with time and the length of credit period that is offered to the customers. The deterioration rate is non-decreasing over time. In addition, the risk of default increases with the credit period length. A generalized model is presented to determine the optimal trade credit and replenishment strategies that maximize the retailer’s annual total profit. We then demonstrate that the retailer’s optimal credit period and replenishment cycle time not only exist but also are unique. Thus, the search of the global optimal solution reduces to finding a local solution. Finally, we run several numerical examples to illustrate the problem and gain managerial insights.

scholarly journals Two – Warehouse Inventory System Model for Deteriorating Items Considering Partial Upstream Trade Credit Financing

2021 ◽  
pp. 69-80
Author(s):  
Z. H. Aliyu ◽  
B. Sani
Keyword(s):  
Sensitivity Analysis ◽  
Credit Risk ◽  
Trade Credit ◽  
Optimal Solution ◽  
Inventory System ◽  
System Model ◽  
Credit Period ◽  
Business Transaction ◽  
Credit Financing ◽  
Relevant Cost

In this study, we developed an inventory system model under two – level trade credit where the supplier considers the retailer as credit risk but the retailer considers the customers as credit worthy. Therefore, the retailer is given a trade credit period on  proportion of the goods ordered whenever he/she pays for proportion of the goods immediately after delivery. In the same vein, the retailer passes the same grace to the customers but without attaching any condition as the customers are assumed credit worthy. This partial upstream trade credit is offered to reduce the risk of failure in payment on the business transaction especially that most retailers are involved in bulk orders. The relevant cost functions are determined and a numerical example is given. Sensitivity analysis was carried out to see the effect of changes in parameters on the optimal solution of the model.

scholarly journals A study of inflation effects on an EOQ model for Weibull deteriorating/ameliorating items with ramp type of demand and shortages

2013 ◽  
Vol 23 (3) ◽  
pp. 441-455 ◽  
Author(s):  
M. Valliathal ◽  
R. Uthayakumar
Keyword(s):  
Computer Software ◽  
Optimal Solution ◽  
Solution Procedure ◽  
Inventory Level ◽  
Decision Variable ◽  
Deterioration Rate ◽  
Eoq Model ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Ramp Type Demand

This paper deals with the effects of inflation and time discounting on an inventory model with general ramp type demand rate, time dependent (Weibull) deterioration rate and partial backlogging of unsatisfied demand. The model is studied under the replenishment policy, starting with shortages under two different types of backlogging rates, and their comparative study is also provided. We then use the computer software, MATLto find the optimal replenishment policies. Duration of positive inventory level is taken as the decision variable to minimize the total cost of the proposed system. Numerical examples are then taken to illustrate the solution procedure. Finally, sensitivity of the optimal solution to changes of the values of different system parameters is also studied.

scholarly journals The Optimal Replenishment Policy under Trade Credit Financing with Ramp Type Demand and Demand Dependent Production Rate

2014 ◽  
Vol 2014 ◽  
pp. 1-18 ◽  
Author(s):  
Juanjuan Qin ◽  
Weihua Liu
Keyword(s):  
Production Rate ◽  
Trade Credit ◽  
Optimal Order ◽  
Maturity Stage ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Replenishment Policy ◽  
Replenishment Cycle ◽  
Credit Financing ◽  
Ramp Type Demand

This paper investigates the optimal replenishment policy for the retailer with the ramp type demand and demand dependent production rate involving the trade credit financing, which is not reported in the literatures. First, the two inventory models are developed under the above situation. Second, the algorithms are given to optimize the replenishment cycle time and the order quantity for the retailer. Finally, the numerical examples are carried out to illustrate the optimal solutions and the sensitivity analysis is performed. The results show that if the value of production rate is small, the retailer will lower the frequency of putting the orders to cut down the order cost; if the production rate is high, the demand dependent production rate has no effect on the optimal decisions. When the trade credit is less than the growth stage time, the retailer will shorten the replenishment cycle; when it is larger than the breakpoint of the demand, within the maturity stage of the products, the trade credit has no effect on the optimal order cycle and the optimal order quantity.

scholarly journals Mathematical analytic techniques for determining the optimal ordering strategy for the retailer under the permitted trade-credit policy of two levels in a supply chain system

Filomat ◽  
2018 ◽  
Vol 32 (12) ◽  
pp. 4195-4207 ◽  
Author(s):  
Jui-Jung Liao ◽  
Kuo-Nan Huang ◽  
Kun-Jen Chung ◽  
Shy-Der Lin ◽  
Pin-Shou Ting ◽  
...  
Keyword(s):  
Trade Credit ◽  
Real Life ◽  
Optimal Solution ◽  
Credit Policy ◽  
Supply Chain System ◽  
Credit Period ◽  
Sales Revenue ◽  
Replenishment Policy ◽  
Optimal Ordering ◽  
Theoretical Results

In this article, we explore a certain kind of two-level trade credit in order to reflect the real-life situations. With this objective in view, we consider the case when the supplier offers two-level trade credit for the retailer for settling the account. If the retailer pays off all accounts at the end of the first credit period, then he/she can utilize the sales revenue to earn interest until the inventory cycle time. On the other hand, if the retailer cannot pay off the unpaid balance at the end of the first credit period, then he/she can decide to pay off the unpaid balance either after the end of the first credit period or after the second credit period. Here, in this situation, the retailer reduces the financed loan from constant sales and revenue received gradually and he/she still can utilize the sales revenue to earn interest when he/she pays off all accounts. Maximizing the profit is used as the objective to develop the inventory model. Based upon the obtained properties of the optimal solution, two theorems are developed to determine the optimal replenishment policy. Finally, computational developments are presented in order to illustrate numerically the main theoretical results which are proven in this article by using some mathematical solution procedures.

scholarly journals An EOQ model for a deteriorating item with non-linear demand under inflation and a trade credit policy

2005 ◽  
Vol 15 (2) ◽  
pp. 209-220 ◽  
Author(s):  
S.K. Manna ◽  
K.S. Chaudhuri
Keyword(s):  
Trade Credit ◽  
Optimal Solution ◽  
Cash Flows ◽  
Credit Policy ◽  
Time Value Of Money ◽  
Time Value ◽  
Eoq Model ◽  
Non Linear ◽  
Demand Rate ◽  
Value Of Money

This paper develops an infinite time-horizon deterministic economic order quantity (EOQ) inventory model with deterioration based on discounted cash flows (DCF) approach where demand rate is assumed to be non-linear over time. The effects of inflation and time-value of money are also taken into account under a trade-credit policy of type "?/T1 net T". The results are illustrated with a numerical example. Sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out.

scholarly journals Learning EOQ Model with Trade-Credit Financing Policy for Imperfect Quality Items under Cloudy Fuzzy Environment

Mathematics ◽  
2022 ◽  
Vol 10 (2) ◽  
pp. 246
Author(s):  
Mahesh Kumar Jayaswal ◽  
Mandeep Mittal ◽  
Osama Abdulaziz Alamri ◽  
Faizan Ahmad Khan
Keyword(s):  
Trade Credit ◽  
Credit Policy ◽  
Screening Process ◽  
Defective Items ◽  
Financing Policy ◽  
Eoq Model ◽  
Fuzzy Environment ◽  
Demand Rate ◽  
Credit Financing ◽  
Quantity Sensitivity

An imprecise demand rate creates problems in profit optimization in business scenarios. The aim is to nullify the imprecise nature of the demand rate with the help of the cloudy fuzzy method. Traditionally, all items in an ordered lot are presumed to be of good quality. However, the delivered lot may contain some defective items, which may occur during production or maintenance. Inspection of an ordered lot is indispensable in most organizations and can be treated as a type of learning. The learning demonstration, a statistical development expressing declining cost, is necessary to achieve any cyclical process. Further, defective items are sold immediately after the screening process as a single lot at a discounted price, and the fraction of defective items follows an S-shaped learning curve. The trade-credit policy is adequate for suppliers and retailers to maximize their profit during business. In this paper, an inventory model is developed with learning and trade-credit policy under the cloudy fuzzy environment where the demand rate is treated as a cloudy fuzzy number. Finally, the retailer’s total profit is maximized with respect to order quantity. Sensitivity analysis is presented to estimate the robustness of the model.

scholarly journals Optimization of generalized order level inventory system under fully permissible delay in payment

2019 ◽  
Author(s):  
BAPPA MONDAL ◽  
Arindam Garai ◽  
Tapan Kumar Roy
Keyword(s):  
Trade Credit ◽  
Inventory System ◽  
Time Dependent ◽  
Eoq Models ◽  
Proposed Model ◽  
Special Cases ◽  
Permissible Delay In Payment ◽  
Demand Rate ◽  
Ramp Type Demand ◽  
Generalized Order

This article presents one generalized order-level inventory system with fully permissible delay in payment in various trade-credit intervals. Review of existing literature nds few EOQ models under simultaneous considerations of time-dependent generalized demand rate, time-dependent generalized rate of deterioration and time-dependent generalized backordering under fully permissible delay in payment. In those existing studies, the optimal inventory depletion time is independent of demand over the entire cycle. Here, present article frames one generalized order level inventory system with fully permissible delay in payment across various trade-credit intervals. This nds that when the trade-credit period is longer than the inventory depletion time to settle the account, the optimal inventory depletion time is dependent of demand. Under this ambiance, one particular case having time-dependent ramp type demand rate, two variables time-dependent Weibull distribution rate of deterioration and time-dependent backordering rate with fully permissible delay in payment, nds that the optimal inventory depletion time varies inversely over demand in that period. Moreover, the proposed model shrinks to obtain many well-established EOQ models as the special cases to it. Next, a general algorithm determines the various optimal solutions corresponding to seven cases. The managerial insights extracted from sensitivity analysis of parameters include the suggestion to halt the promotional activities so as to foreshorten the demand in shortage period. Also, this analysis attests that the longer waiting period of retailers should be counterbalanced with various promotional activities and anticipated benefits.

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