An EPQ model for two-warehouse in unremitting release pattern with two-level trade credit period concerning both supplier and retailer

The present study deals with the development of an integrated production inventory model of supplier and retailer where a delay in payment is accessible by supplier towards the retailer and also by retailer en route for customer. Moreover, this paper relates to two warehouse inventory policy with continuous discharge along with two‐level of credit period in a finite planning horizon. A retailer‐ the owner of two warehouses offers and accepts a credit period to the customer and from the wholesaler respectively. Depending upon the time of offering and accepting credit periods and with respect to the time of exhaust of inventory in two warehouses, different scenarios have been depicted in this approach of study. The objective of the current study is to minimize the total integrated cost of both supplier and retailer. Furthermore, an alternative approach of payment for the remaining inventory after the credit period has also been proposed in the present study. This new approach to analyze the interest earned by the retailer has been specified in this model, which has been explained with the help of numerical examples in conjunction with sensitivity analysis and the outcome is contrasted against the above cited traditional approach as well. The model has been developed as a cost minimization problem with respect to the retailer and supplier and has been optimized using the non‐linear optimization technique – Generalized Reduced Gradient method (LINGO). The optimal solutions under different scenarios have been exemplified numerically and graphically in this study.