Two – Warehouse Inventory System Model for Deteriorating Items Considering Partial Upstream Trade Credit Financing
Asian Research Journal of Mathematics,
Page 69-80
DOI:
10.9734/arjom/2021/v17i1130342
Abstract
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.
Keywords:
- Downstream
- partial upstream
- deterioration
- credit –risk
- trade credit period.
How to Cite
References
Teng JT. On the EOQ models under conditions of permissible delay in payments. Journal of Operation Research Society. 2002;53(8): 915–918.
Goyal SK. Economic order quantity model under conditions of permissible delay in payments. Journal of Operation Research Society. 1985;36(4):335–338.
Huang YF, Hsu KH. An EOQ model under retailer partial trade credit policy in supply chain. International Journal of Production Economics. 2008;112: 655–664.
Liang Y, Zhou F. A two – warehouse inventory model for deteriorating items under conditionally permissible delay in payments. Applied Mathematical Modelling. 2011;35:2221–2231.
Bhunia AK, Jaggi CK, Sharma A, Sharma R. A two – warehouse inventory model for deteriorating items under permissible delay in payment with partial backlogging. Applied Mathematics and Computation. 2014;232:1125–1137.
Chang CT. An EOQ model with deteriorating items under inflation when supplier credit linked to order quantity. International Journal of Production Economics. 2004;88:307–316.
Chang CT, Ouyang LY, Teng JT. An EOQ model for deteriorating items under supplier credit linked to order quantity. Applied Mathematical Modelling. 2003;27(12): 983–996.
Yang HL. An inventory model for ramp – type demand with two – level trade credit financing linked to order quantity. Open Journal of Business and Management. 2019;7: 427–446.
Teng JT. Optimal ordering policies for a retailer who offers distinct trade credit to its good and bad credit customers. International Journal of Production Economics. 2009;119:415–423.
Wu J, Al – Khateeb FB, Teng JT, Cardenas – Barron LE. Inventory models for deteriorating items with maximum lifetime under downstream partial trade credits to credit – risk customer by discounted cash flow analysis. International Journal of Production Economics. 2016;171:105–142.
Huang YF. Optimal retailer’s ordering policies in the EOQ model under trade credit financing. Journal of Operation Research Society. 2003;54(9):1011–1015.
Shah NH, Cardenas – Barron LE. Retailer’s decision for ordering and credit policies for deteriorating items when the supplier offers order – linked credit period or cash discount. Applied Mathematics and Computations. 2015;259:569–578.
Shinn SW, Hwang H. Optimal pricing and ordering policies for retailers under order – size – dependent delay in payment. Computation Operation Research. 2003;30:35–50.
-
Abstract View: 227 times
PDF Download: 110 times
