Ordering policies of deteriorating items under permissible delay in payments

Ordering policies of deteriorating items under permissible delay in payments

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Article ID: iaor1996414
Country: United Kingdom
Volume: 46
Issue: 5
Start Page Number: 658
End Page Number: 662
Publication Date: May 1995
Journal: Journal of the Operational Research Society
Authors: ,
Keywords: deteriorating items
Abstract:

In developing mathematical models in inventory control it is assumed that payment will be made to the supplieir for the goods immediately after receiving the consignment. However, in practice, it is found that the supplier allows a certain fixed period to settle the account. During this fixed period no interest is charged by the supplier, but beyond this period interest is charged under the terms and conditions agreed upon and, moreover, interest can be earned on the revenue received during the credit period. In this paper an attempt has been made to obtain the optimum order quantity of deteriorating items under a permissible delay in payments. A numerical example is also given.

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