A study on an inventory model for non-instantaneous deteriorating items with permissible delay in payments

A study on an inventory model for non-instantaneous deteriorating items with permissible delay in payments

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Article ID: iaor20072190
Country: Netherlands
Volume: 51
Issue: 4
Start Page Number: 637
End Page Number: 651
Publication Date: Dec 2006
Journal: Computers & Industrial Engineering
Authors: , ,
Keywords: financial
Abstract:

In this study, an appropriate inventory model for non-instantaneous deteriorating items with permissible delay in payments is considered. The purpose of this study is to find an optimal replenishment policy for minimizing the total relevant inventory cost. This mathematical model is a general framework that comprises numerous previous models such as in Ghare and Schrader and Teng as special cases. We have developed some useful theorems to characterize the optimal solutions and provide an easy-to-use method to find the optimal replenishment cycle time and order quantity under various circumstances. Several numerical examples are given to test and verify the theoretical results. Finally, a sensitivity analysis of the optimal solution with respect to major parameters is also included. According to the results of numerical analysis, we provided several ways for the retailer to effectively reduce total annual relevant inventory cost.

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