Inventory Replenishment Policies for Two Successive Generations of Technology Products Under Permissible Delay in Payments

Abstract

In this age of digitalization, when every industry is undergoing technological disruption, there is a big role of digital gadgets and technology products. A key feature of these digital gadgets is the short length of the product life cycle, since the newer and more advanced generations of technologies are developed regularly to replace the earlier conventional technologies. The traditional EOQ models that assume a constant demand cannot be used here. This research paper formulates an inventory optimization model for the multi-generational products under the trade credits and the credit-linked and innovation diffusion dependent demand. The study also performs a numerical illustration of the proposed model, and establishes important dynamics among the key variables. It also performs the sensitivity analysis with the cost of credit and the trade credit period. The paper concludes with the managerial implications for the inventory practitioners and the possible areas of extension for this research in the future.

An Innovative Approach to Optimize Inbound Delivery Scheduling at Distribution Centers

“…Methodologies include economic order quantity, reorder point, just-in-time, kanban, etc. Nagpal et al (2022) proposed an innovative inventory optimization model for short-life cycle products that is suitable for the high-tech industry. Thurman (2021) assessed different inventory replenishment strategies for Target Corporation.…”