Optimal order strategy with time-varying demand under permissible delay in payments linked to order quantity

2013 ◽  
Author(s):  
Mo Jiang-tao ◽  
Li Zhong-hui ◽  
Lu Yue-li ◽  
Liang Li
Keyword(s):  
Optimal Order ◽  
Time Varying ◽  
Order Quantity ◽  
Permissible Delay In Payments ◽  
Delay In Payments ◽  
Varying Demand

scholarly journals Retailer’s replenishment policies under conditions of permissible delay in payments

2004 ◽  
Vol 14 (2) ◽  
pp. 231-246 ◽  
Author(s):  
Yung-Fu Huang
Keyword(s):  
Cycle Time ◽  
Real Life ◽  
Optimal Order ◽  
Selling Price ◽  
Order Quantity ◽  
Permissible Delay In Payments ◽  
Credit Period ◽  
Optimal Order Quantity ◽  
Delay In Payments ◽  
S Model

Goyal (1985) is frequently cited when the inventory systems under conditions of permissible delay in payments are discussed. Goyal implicitly assumed that: 1. The unit selling price and the unit purchasing price are equal; 2. At the end of the credit period, the account is settled. The retailer starts paying for higher interest charges on the items in stock and returns money of the remaining balance immediately when the items are sold. But these assumptions are debatable in real-life situations. The main purpose of this paper is to modify Goyal?s model to allow the unit selling price and the unit purchasing price not necessarily be equal to reflect the real-life situations. Furthermore, this paper will adopt different payment rule. We assume that the retailer uses sales revenue during the permissible credit period to make payment to the supplier at the end of the credit period. If it is not enough to pay off the purchasing cost of all items, the retailer will pay off the remaining balance by taking loan from the bank. So, the retailer starts paying for the interest charges on the amount of loan from the bank after the account is settled. Then the retailer will return money to the bank at the end of the inventory cycle. Under these conditions, we model the retailer?s inventory system as a cost minimization problem to determine the retailer?s optimal cycle time and optimal order quantity. Four cases are developed to efficiently determine the optimal cycle time and the optimal order quantity. Numerical examples are given to illustrate these cases. Comparing with Goyal?s model, we also find that the optimal cycle times in this paper are not longer than those of Goyal?s model.

scholarly journals An EPQ model under cash discount and permissible delay in payments derived without derivatives

2007 ◽  
Vol 17 (2) ◽  
pp. 177-193 ◽  
Author(s):  
Yung-Fu Huang ◽  
Chung-Li Chou ◽  
Jui-Jung Liao
Keyword(s):  
Cycle Time ◽  
Optimal Order ◽  
Selling Price ◽  
Order Quantity ◽  
Permissible Delay In Payments ◽  
Special Cases ◽  
Time Optimal ◽  
Optimal Order Quantity ◽  
Cash Discount ◽  
Delay In Payments

The main purpose of this paper is to investigate the case where the retailer?s unit selling price and the purchasing price per unit are not necessarily equal within the economic production quantity (EPQ) framework under cash discount and permissible delay in payments. We establish the retailer?s inventory system as a cost minimization problem to determine the retailer?s optimal inventory cycle time, optimal order quantity and optimal payment time. This paper provides an algebraic approach to determine the optimal cycle time, optimal order quantity and optimal payment time. This approach provides one theorem to efficiently determine the optimal solution. Some previously published results of other researchers are deduced as special cases. Finally, numerical examples are given to illustrate the result and the managerial insights are also obtained.

scholarly journals ENVIRONMENTALLY SUSTAINABLE INVENTORY MODEL UNDER PERMISSIBLE DELAY IN PAYMENTS

2013 ◽  
Vol 11 (10) ◽  
pp. 3071-3078 ◽  
Author(s):  
W. Ritha ◽  
I. Antonitte Vinoline
Keyword(s):  
Cycle Time ◽  
Cost Minimization ◽  
Extreme Case ◽  
Optimal Order ◽  
Order Quantity ◽  
Permissible Delay In Payments ◽  
Replenishment Policy ◽  
Optimal Order Quantity ◽  
Cost Minimization Problem ◽  
Delay In Payments

Within the economic order quantity (EOQ) framework, the main purpose of this paper is to investigate the supplier optimal replenishment policy of permissible delay in payments. All previously published articles dealing with optimal order quantity with permissible delay in payments assumed that the supplier only offers the retailer fully permissible delay in payments if the retailer ordered a sufficient quantity. Otherwise, permissible delay in payments would not be permitted. However, in this paper, we want to extend this extreme case by developing the mathematical model for determining the cycle time. Under this condition, we model the retailers inventory system as a cost minimization problem to determine the retailers optimal inventory cycle time and optimal order quantity. Finally, numerical examples are given to illustrate all these cases and to draw managerial insights.

scholarly journals Retailer's EOQ Model with Limited Storage Space Under Partially Permissible Delay in Payments

2007 ◽  
Vol 2007 ◽  
pp. 1-18 ◽  
Author(s):  
Yung-Fu Huang ◽  
Chih-Sung Lai ◽  
Maw-Liann Shyu
Keyword(s):  
Lot Sizing ◽  
Cost Minimization ◽  
Optimal Order ◽  
Storage Space ◽  
Order Quantity ◽  
Permissible Delay In Payments ◽  
Eoq Model ◽  
Replenishment Policy ◽  
Cost Minimization Problem ◽  
Delay In Payments

The main purpose of this paper wants to investigate the optimal retailer's lot-sizing policy with two warehouses under partially permissible delay in payments within the economic order quantity (EOQ) framework. In this paper, we want to extend that fully permissible delay in payments to the supplier would offer the retailer partially permissible delay in payments. That is, the retailer must make a partial payment to the supplier when the order is received. Then the retailer must pay off the remaining balance at the end of the permissible delay period. In addition, we want to add the assumption that the retailer's storage space is limited. That is, the retailer will rent the warehouse to store these exceeding items when the order quantity is larger than retailer's storage space. Under these conditions, we model the retailer's inventory system as a cost minimization problem to determine the retailer's optimal cycle time and optimal order quantity. Three theorems are developed to efficiently determine the optimal replenishment policy for the retailer. Finally, numerical examples are given to illustrate these theorems and obtained a lot of managerial insights.

Fuzzification of EOQ Model Under the Condition of Permissible Delay in Payments

2012 ◽  
Vol 3 (2) ◽  
pp. 1-19 ◽  
Author(s):  
Chandra K. Jaggi ◽  
Anuj Sharma ◽  
Reena Jain
Keyword(s):  
Fuzzy Numbers ◽  
Delay Period ◽  
Order Quantity ◽  
Distance Method ◽  
Permissible Delay In Payments ◽  
Signed Distance ◽  
Eoq Model ◽  
Fuzzy Environment ◽  
Delay In Payments ◽  
The Cost

This paper formulates an economic order quantity inventory model under the condition of permissible delay in payments in fuzzy environment. All the parameters of the model, excluding permissible delay period and cycle length, are taken to be trapezoidal Fuzzy numbers. The arithmetic operations are defined under the function principle. The cost function has been defuzzified using signed distance method and thereby solved to obtain the optimal replenishment period. The numerical example is presented to show the validity of the model followed by sensitivity analysis.

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