An Ordering Policy for Deteriorating Items with Allowable Shortage and Permissible Delay in Payment

Jamal, A. M. M.; Sarker, B. R.; Wang, S.

doi:10.2307/3010710

Cited by 85 publications

(91 citation statements)

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“…Shah (1993) studied the effect of deterioration in Goyal's model by calculating interest earned on selling price which is higher than the purchase cost. Jamal et al (1997) incorporated shortages to minimize total cost per unit time of an inventory system. Hwang and Shinn (1997) analyzed the effect of credit period on purchase quantity under price-sensitive demand.…”

Section: Introductionmentioning

confidence: 99%

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Shah¹

2017

10.5267/j.uscm

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The player uses credit financing to perform profitable business. We analyze an economic order quantity model in which items have a fixed lifetime and deteriorate over time. The supplier offers the retailer a full credit period whenever the retailer orders more than or equal to a prespecified quantity. If the retailer orders less than pre-specified order quantity, then the retailer will do partial payment to the supplier and avail of delay in payments for the remaining outstanding amount. The demand is price-sensitive. The retailer's profit is maximized by setting appropriate retail price and replenishment time. The algorithm is developed to choose the best policy for the decision maker from the number of alternatives. Numerical data is used to validate the theoretical developments. Managerial insights are discussed. It is observed that for a given units to qualify for avail of partial credit period, increase in ordering cost decreases profit of the retailer. The increase in rate of the purchase cost to avail of delay payment suggests that to have a more profit, retailer should deplete stock before the allowable credit period.Growing Science Ltd. All rights reserved. 7

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Section: Introductionmentioning

confidence: 99%

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Shah¹

2017

10.5267/j.uscm

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“…Kim et al (1995) examined the effect of credit period to increase wholesaler's profits with demand as a function of price. Jamal et al (1997) also generalized Goyal's model to allow for shortages. Teng (2002) further analyzed Goyal's model to include that it is more profitable to order less quantity and make use for permissible delay more frequently.…”

Section: Introductionmentioning

confidence: 99%

Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit

Khanna¹,

Kishore²,

Jaggi³

2017

10.5267/j.ijiec

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Quality decisions are one of the major decisions in inventory management. It affects customer's demand, loyalty and customer satisfaction and also inventory costs. Every manufacturing process is inherent to have some chance causes of variation which may lead to some defectives in the lot. So, in order to cater the customers with faultless products, an inspection process is inevitable, which may also be prone to errors. Thus for an operations manager, maintaining the quality of the lot and the screening process becomes a challenging task, when his objective is to determine the optimal order quantity for the inventory system. Besides these operational tasks, the goal is also to increase the customer base which eventually leads to higher profits. So, as a promotional tool, trade credit is being offered by both the retailer and supplier to their respective customers to encourage more frequent and higher volume purchases. Thus taking into account of these facts, a strategic production model is formulated here to study the combined effects of imperfect quality items, faulty inspection process, rework process, sales return under two level trade credit. The present study is a general framework for many articles and classical EPQ model. An analytical method is employed which jointly optimizes the retailer's credit period and order quantity, so as to maximize the expected total profit per unit time. To study the behavior and application of the model, a numerical example has been cited and a comprehensive sensitivity analysis has been performed. The model can be widely applicable in manufacturing industries like textile, footwear, plastics, electronics, furniture etc.

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“…Hwang and Shinn (1997) dealt with pricing and lot sizing decisions for exponentially deteriorating products, with also permissible delay in payments. Jamal et al (1997) generalized Aggarwal and Jaggi's model to allow for shortages. Chang and Dye (2001) extended Jamal et al's model.…”

Section: Introductionmentioning

confidence: 99%

Pricing and inventory control policy for non-instantaneous deteriorating items with time- and price-dependent demand and partial backlogging

Farughi¹,

Khanlarzade²,

Yegane³

2014

10.5267/j.dsl

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Determining the optimal inventory control and selling price for deteriorating items is of great significance. In this paper, a joint pricing and inventory control model for deteriorating items with price-and time-dependent demand rate and time-dependent deteriorating rate with partial backlogging is considered. The objective is to determine the optimal price, the replenishment time, and economic order quantity such that the total profit per unit time is maximized. After modeling the problem, an algorithm is proposed to solve the resulted problem. We also prove that the problem statement is concave function and the optimal solution is indeed global.

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An Ordering Policy for Deteriorating Items with Allowable Shortage and Permissible Delay in Payment

Cited by 85 publications

References 0 publications

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit

Pricing and inventory control policy for non-instantaneous deteriorating items with time- and price-dependent demand and partial backlogging

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