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.

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.

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 EOQ Model for Deteriorating Items with Stock-Level-Dependent Demand Rate and Order-Quantity-Dependent Trade Credit

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Jie Min ◽  
Jian Ou ◽  
Yuan-Guang Zhong ◽  
Xin-Bao Liu
Keyword(s):  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Deteriorating Items ◽  
Order Quantity ◽  
Eoq Model ◽  
Demand Rate ◽  
Delay In Payments ◽  
Dependent Demand Rate ◽  
Dependent Demand

This paper develops a generalized inventory model for exponentially deteriorating items with current-stock-dependent demand rate and permissible delay in payments. In the model, the payment for the item must be made immediately if the order quantity is less than the predetermined quantity; otherwise, a fixed trade credit period is permitted. The maximization of the average profit per unit of time is taken as the inventory system’s objective. The necessary and sufficient conditions and some properties of the optimal solution to the model are developed. Simple solution procedures are proposed to efficiently determine the optimal ordering policies of the considered problem. Numerical example is also presented to illustrate the solution procedures obtained.

scholarly journals Retailer’s Joint Ordering, Pricing, and Preservation Technology Investment Policies for a Deteriorating Item under Permissible Delay in Payments

2018 ◽  
Vol 2018 ◽  
pp. 1-14 ◽  
Author(s):  
Umakanta Mishra ◽  
Jacobo Tijerina-Aguilera ◽  
Sunil Tiwari ◽  
Leopoldo Eduardo Cárdenas-Barrón
Keyword(s):  
Trade Credit ◽  
Optimal Solution ◽  
Inventory Model ◽  
Selling Price ◽  
Permissible Delay In Payments ◽  
Investment Policies ◽  
Technology Investment ◽  
Preservation Technology ◽  
Preservation Technology Investment ◽  
Delay In Payments

This article develops an inventory model for deteriorating items with controllable deterioration rate (by using preservation technology) under trade credit policy. As in practical scenarios the demand of an item is directly associated with its selling price, keeping this in mind, it is assumed to be a price dependent demand. The main objective of the inventory model is to determine jointly the optimal ordering, pricing, and preservation technology investment policies for retailer so that the total profit is maximized. The effects of key parameters on optimal solution are studied through a sensitivity analysis with the aim of examining the behavior of the inventory model with controllable deterioration under the permissible delay in payments.

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.

Optimal trade credit and replenishment policies for non-instantaneous deteriorating items

2020 ◽  
Vol 54 (6) ◽  
pp. 1793-1826
Author(s):  
Anuj Kumar Sharma ◽  
Sunil Tiwari ◽  
V.S.S. Yadavalli ◽  
Chandra K. Jaggi
Keyword(s):  
Solution Method ◽  
Trade Credit ◽  
Optimal Solution ◽  
Inventory Model ◽  
Deteriorating Items ◽  
Selling Price ◽  
Credit Policy ◽  
Demand Rate ◽  
Fuzzy Inventory ◽  
The Impact

The present study presents a fuzzy inventory model for non-instantaneous deteriorating items under conditions of permissible delay in payments. In the current paper, we incorporate the condition in which, the supplier accepts the partial payment at the end of the credit period and the reaming amount after that period under the term and condition. Here, the demand rate is a function of the selling price. Also, it is assumed that shortages are allowed and are fully backlogged. The present paper also considers that the interest earned (IE) on the fixed deposit amount, i.e., revenue generated by fulfilling the shortage, balance amount, after settling the account is higher than that of usual interest rate (Ie). Hence, the objective of this study is to determine the retailer’s optimal policies that maximize the total profit. Also, some theoretical results are obtained, which shows that the optimal solution not only exists, it is unique also. The impact of the new proposed credit policy is investigated on the optimality of the solution for the non-instantaneous deteriorating products. The validation of the proposed model and its solution method is demonstrated through the numerical example. The results indicate that the inventory model, along with the solution method, provides a powerful tool to the retail managers under real-world situations. Results demonstrate that it is essential for the managers to consider the inclusion of new proposed credit policy significantly increases the net annual profit.

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