scholarly journals Inventory Model with Inflation under Credit Period and Shortage

2020 ◽  
Vol 9 (5) ◽  
pp. 1050-1055
Keyword(s):  
Sensitivity Analysis ◽  
Inventory Model ◽  
Optimal Order ◽  
Selling Price ◽  
Credit Period ◽  
Numerical Examples ◽  
Price Function ◽  
Total Profit ◽  
Time Gap ◽  
Delay In Payments

In this study, an deterministic inventory model based on the concept of permissible delay in payments is discussed. Demand is assumed to be price dependent, and a constant price function represents it. Shortages are allowed and partially backlogged. In the realistic environment, it observed that there are several items like dry fruits, vegetables, grocery, and fruits, etc. which deteriorate after a time gap. So this model is also based on non-instantaneous deterioration. This study aims is to optimize the optimal order level and selling price to maximize the retailer`s total profit. Finally, numerical examples solved by using a proposed algorithm to show the validity of the model and sensitivity analysis done on parameters

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.

Retailer’s Ordering Policy in a Supply Chain when Demand is Price and Credit Period Dependent

2012 ◽  
pp. 262-277
Author(s):  
Chandra K. Jaggi ◽  
Amrina Kausar
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Great Risk ◽  
Trade Credit ◽  
Inventory Model ◽  
Partial Credit ◽  
Credit Period ◽  
Numerical Examples ◽  
On Demand ◽  
Ordering Policy

Trade credit is a well established promotional tool in the present competitive world and its impact on demand cannot be ignored. Businesses often use trade credit to increase their market share and, in turn, the profit. Undoubtedly, trade credit plays a great role in increasing the demand but it also involves a great risk of non-payment. In order to reduce the risk of non-payment, businessman at times use a partial trade credit policy in which they demand a certain percentage of the total amount from the customer at the time of purchase and offers the credit for the remaining amount. Furthermore, it is also observed that the demand of FMCG is highly price sensitive. In order to see the effect of credit and price together, on demand, the retailer’s demand is taken as a function of price and credit period. Moreover it is assumed that the supplier offers the full credit to the retailer but the retailer passes a partial credit to customers. The inventory model, determines the optimal replenishment time, credit period, and price for the retailer that maximizes profit. Numerical examples have been provided to support the model followed by the comprehensive sensitivity analysis.

scholarly journals An inventory model for deteriorating items under the condition of permissible delay in payments

2002 ◽  
Vol 12 (1) ◽  
pp. 73-84 ◽  
Author(s):  
Horng-Jinh Chang ◽  
Chung-Yuan Dye ◽  
Bor-Ren Chuang
Keyword(s):  
Real World ◽  
Inventory Model ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Permissible Delay In Payments ◽  
Credit Period ◽  
Numerical Examples ◽  
Eoq Models ◽  
Delay In Payments

In economic order quantity (EOQ) models, it is often assumed that the payment of an order is made on the receipt of items by the inventory system. However, such an assumption is not quite practical in the real world. Under most market behaviors, it can be easily found that a vendor provides a credit period for buyers to stimulate demand. In this paper, a varying rate of determination and the condition of permissible delay in payments used in conjunction with the economic order quantity model are the focus of discussion. Numerical examples are presented to illustrate the proposed models.

scholarly journals An EOQ model for deteriorating items analyzing retailer’s optimal strategy under trade credit and return policy with nonlinear demand and resalable returns

2022 ◽  
Vol 12 (1) ◽  
pp. 47-55
Author(s):  
Mamta Kumari ◽  
Pijus Kanti De
Keyword(s):  
Trade Credit ◽  
Inventory Model ◽  
Optimal Order ◽  
Selling Price ◽  
Return Policy ◽  
Eoq Model ◽  
Proposed Model ◽  
Total Profit ◽  
Replenishment Cycle ◽  
Full Trade Credit

This paper presents an EOQ model where demand is dependent upon time and selling price. In the proposed model of inventory, the retailer allows its unsatisfied customers to return their product whereas the manufacturer offers a full trade credit policy to the retailer. To make our model realistic, we have assumed that the product returned can be resold with the same selling price. Number of returns is a function of demand. In this proposed inventory model considering deterioration, the retailer does not fully reimburse its customers for the returned product. The primary purpose of this inventory model is to determine the optimal selling price, optimal order quantity, and optimal replenishment cycle length in order to maximize the retailer’s total profit earned per unit time. A numerical example is also presented and a sensitivity analysis is carried to highlight the findings of the suggested inventory model.

scholarly journals Inventory Modeling for Deteriorating Imperfect Quality Items with Selling Price Dependent Demand and Shortage Backordering under Credit Financing

2017 ◽  
Vol 2 (2) ◽  
pp. 110-124 ◽  
Author(s):  
Aditi Khanna ◽  
Prerna Gautam ◽  
Chandra K. Chandra K.
Keyword(s):  
Trade Credit ◽  
Optimal Order ◽  
Manufacturing Processes ◽  
Selling Price ◽  
Imperfect Quality ◽  
Inspection Process ◽  
Total Profit ◽  
Credit Financing ◽  
Fierce Competition ◽  
Dependent Demand

The production processes throughout the world aim at improving quality by introducing latest technologies so as to perform well in fierce competition. Despite this due to various unavoidable factors, most of the manufacturing processes end up with certain imperfections. Hence, all the items produced are not of perfect quality. The condition tends to be more susceptible while dealing with items of deteriorating quality; therefore an inspection process is must for screening good quality items from the ordered lot. Demand is assumed to be price dependent and it is represented by a constant price elasticity function. Also to endure with the rapid growth and turbulent markets, the suppliers try to engage and attract retailers through various gimmicks and one such contrivance is offering trade credit, which is proved to be an influential strategy for attracting new customers. In view of this, the present paper develops an inventory model for items of imperfect quality with deterioration under trade-credit policies with price dependent demand. Shortages are allowed and fully backlogged. A mathematical model is developed to depict this scenario. The aim of the study is to optimize the optimal order level, backorder level and selling price so as to maximize the retailer’s total profit. Findings are validated quantitatively by using numerical analysis. Sensitivity analysis is also performed so as to cater some important decision-making insights.

Optimal Ordering for Deteriorating Items of Fixed-Life with Quadratic Demand and Two-Level Trade Credit

2016 ◽  
pp. 1-16 ◽  
Author(s):  
Nita H. Shah ◽  
Mrudul Yogeshkumar Jani
Keyword(s):  
Sensitivity Analysis ◽  
Decision Maker ◽  
Trade Credit ◽  
Life Time ◽  
Deteriorating Items ◽  
Total Cost ◽  
Credit Period ◽  
Numerical Examples ◽  
Optimal Ordering ◽  
Purchase Quantity

This chapter studies the retailer's ordering policies when items in the stocking system has fixed life time and subject to deteriorate with time. The demand is considered to be quadratically decreasing. The supplier offers credit period to the retailer which in turn is partially passed on to customer. The retailer is the decision maker and the objective is to minimize the total cost of the system by ordering optimum purchase quantity. Numerical examples are given to find the best possible scenario for the retailer. Sensitivity analysis is carried out to derive player's insights.

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 An Inventory Model for Deteriorating Items with Stock Dependent Demand and Partial Backlogging

2021 ◽  
Vol 9 (12) ◽  
pp. 296-302
Author(s):  
Vikas Kumar
Keyword(s):  
Waiting Time ◽  
Simple Algorithm ◽  
Inventory Model ◽  
Deteriorating Items ◽  
Partial Backlogging ◽  
Numerical Examples ◽  
Proposed Model ◽  
Stock Dependent Demand ◽  
Total Profit ◽  
Dependent Demand

Abstract: In this paper, we formulate a deteriorating inventory model with stock-dependent demand Moreover, it is assumed that the shortages are allowed and partially backlogged, depending on the length of the waiting time for the next replenishment. The objective is to find the optimal replenishment to maximizing the total profit per unit time. We then provide a simple algorithm to find the optimal replenishment schedule for the proposed model. Finally, we use some numerical examples to illustrate the model. Keywords- Inventory, Deteriorating items, Stock dependent demand, Partial backlogging

Retailer’s Ordering Policy in a Supply Chain when Demand is Price and Credit Period Dependent

2011 ◽  
Vol 2 (4) ◽  
pp. 61-74 ◽  
Author(s):  
Chandra K. Jaggi ◽  
Amrina Kausar
Keyword(s):  
Sensitivity Analysis ◽  
Trade Credit ◽  
Credit Policy ◽  
Great Role ◽  
Credit Period ◽  
Numerical Examples ◽  
On Demand ◽  
Partial Trade Credit ◽  
Full Credit ◽  
Ordering Policy

Trade credit is a well established promotional tool in the present competitive world and its impact on demand cannot be ignored. Businesses often use trade credit to increase their market share and, in turn, the profit. Undoubtedly, trade credit plays a great role in increasing the demand but it also involves a great risk of non-payment. In order to reduce the risk of non-payment, businessman at times use a partial trade credit policy in which they demand a certain percentage of the total amount from the customer at the time of purchase and offers the credit for the remaining amount. Furthermore, it is also observed that the demand of FMCG is highly price sensitive. In order to see the effect of credit and price together, on demand, the retailer’s demand is taken as a function of price and credit period. Moreover it is assumed that the supplier offers the full credit to the retailer but the retailer passes a partial credit to customers. The inventory model, determines the optimal replenishment time, credit period, and price for the retailer that maximizes profit. Numerical examples have been provided to support the model followed by the comprehensive sensitivity analysis.

Deteriorating Inventory Model under Permissible Delay in Payments and Fuzzy Environment

2016 ◽  
pp. 77-99 ◽  
Author(s):  
Nita H. Shah ◽  
Sarla Pareek ◽  
Isha Sangal
Keyword(s):  
Solution Procedure ◽  
Inventory Model ◽  
Variable Cost ◽  
Selling Price ◽  
Gravity Method ◽  
Deterioration Rate ◽  
Eoq Model ◽  
Fuzzy Environment ◽  
Demand Rate ◽  
Delay In Payments

This paper deals with the problem of determining the EOQ model for deteriorating items in the fuzzy sense where delay in payments is permissible. The demand rate, ordering cost, selling price per item and deterioration rate are taken as fuzzy numbers. The total variable cost in fuzzy sense is de-fuzzified using the centre of gravity method. The solution procedure has been explained with the help of numerical example.

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