Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/172579 
Year of Publication: 
2017
Citation: 
[Journal:] Journal of Industrial Engineering International [ISSN:] 2251-712X [Volume:] 13 [Issue:] 4 [Publisher:] Springer [Place:] Heidelberg [Year:] 2017 [Pages:] 427-443
Publisher: 
Springer, Heidelberg
Abstract: 
In this paper we develop an economic order quantity model to investigate the optimal replenishment policies for instantaneous deteriorating items under inflation and trade credit. Demand rate is a linear function of selling price and decreases negative exponentially with time over a finite planning horizon. Shortages are allowed and partially backlogged. Under these conditions, we model the retailer's inventory system as a profit maximization problem to determine the optimal selling price, optimal order quantity and optimal replenishment time. An easy-to-use algorithm is developed to determine the optimal replenishment policies for the retailer. We also provide optimal present value of profit when shortages are completely backlogged as a special case. Numerical examples are presented to illustrate the algorithm provided to obtain optimal profit. And we also obtain managerial implications from numerical examples to substantiate our model. The results show that there is an improvement in total profit from complete backlogging rather than the items being partially backlogged.
Subjects: 
Inventory
Deterioration
Trade credit
Backlogging
Inflation
Time value of money
Finite planning
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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