Article ID: | iaor20003295 |
Country: | Singapore |
Volume: | 16 |
Issue: | 1 |
Start Page Number: | 23 |
End Page Number: | 34 |
Publication Date: | May 1999 |
Journal: | Asia-Pacific Journal of Operational Research |
Authors: | Chen Miao-Sheng, Chuang Chung-Chu |
Keywords: | credit, economic order |
Buyer's inventory policy is related to the credit line and credit period offered by the supplier. A mathematical inventory model of a light buyer is formulated under trade credit and its optimal solution can be determined by five financial indices. On comparing these five financial indices in size, the economic order quantity can be decided. Financial managers can make reference to this property when they make the investment and financing policies of working capital.