| Article ID: | iaor199032 |
| Country: | United States |
| Volume: | 27 |
| Start Page Number: | 58 |
| End Page Number: | 65 |
| Publication Date: | Mar 1986 |
| Journal: | Production and Inventory Management Journal |
| Authors: | Davis Robert A., Gaither Norman |
Suppliers often offer a one-time opportunity to delay billing, and methods to determine optimal order quantities are developed for three types of such offers. The number of extra units a materials manager should order under these circumstances depends on: (1) the returns available on alternative investments or cost of capital, (2) length of billing delay, and (3) demand and cost of the material.