This study presents an inventory model to determine an optimal ordering policy for non-deteriorating items and timedependent demand rate with delay in payments permitted by the supplier under inflation and time discounting. Mathematical models have been derived under two different situations, i.e. Case I: The permissible delay period is less than or equal to replenishment cycle period for settling the account and Case II: The permissible delay period is greater than replenishment cycle period for settling the account. This study determines the optimal cycle period and optimal payment period for item so that the annual total relevant cost is minimized. An algorithm is given to obtain optimal solution. The main purpose of this paper is to investigate the optimal (minimum) total present value of the costs over the time horizon H for both cases (i.e. case I and II). An algorithm is used to obtain the minimum total present value of the costs over the time horizon H. Finally, a numerical example and sensitivity analysis demonstrate the applicability of the proposed model and managerial insights.

This study develops an EOQ model for retailer’s price and lot size simultaneously when the supplier permits delay in payments for an order of a product whose demand rate is a constant price elastic function for non-deteriorating items. In this study, mathematical models have been discussed under two different situations, i.e., case I: The credit period is less than or equal to cycle time for setting the account; and case II: The credit period is greater than the cycle time for setting the account. Expressions for an inventory system’s net profit are derived for these two cases. The authors develop algorithm for a retailer to determine its optimal price and lot size simultaneously, when supplier offers a permissible in payments.

In most of the classical inventory models the demand is considered as constant. In this paper the model has been framed to study the items whose demand and deterioration both are constant. The authors developed a model to determine an optimal order quantity by using calculus technique of maxima and minima. Thus, it helps a retailer to decide its optimal ordering quantity under the constraints of constant deterioration rate and constant pattern of demand.