Article ID: | iaor19942130 |
Country: | Netherlands |
Volume: | 34 |
Issue: | 2 |
Start Page Number: | 151 |
End Page Number: | 155 |
Publication Date: | Mar 1994 |
Journal: | International Journal of Production Economics |
Authors: | Jaggi C.K., Aggarwal S.P. |
Keywords: | deteriorating items |
This paper presents the economic ordering policies of deteriorating items in the presence of trade credit using a discounted cash-flows (DCF) approach. A DCF approach permits a proper recognition of the financial implication of the opportunity cost and out-of-pocket costs in inventory analysis. It also permits an explicit recognition of the exact timing of cash-flows associated with an inventory system. A comprehensive sensitivity analysis has also been done.