An EOQ model with trade credit period depending on the ordering quantity

The paper deals with the problem of determining the economic order quantity under conditions of permissible delay in payments. A new credit period scheme is proposed under which the supplier offers to the buyer a fixed base level credit period in settling the account, plus additional delay time depending on the quantity ordered. The optimal replenishment policy is determined by examining the signs of some characteristics functions of the parameters appeared in the model. Examples are given to highlight the results obtained.