Ordering Policy for Imperfect- Quality Deteriorating Items with Initial-Inspection and Allowable Shortage under the Condition of Permissible Delay in Payments

While developing the inventory model with shortages under permissible delay in payments, it has been observed in the literature that the researchers have not considered the fact that the retailer can earn interest on the revenue generated after fulfilling the outstanding demand as soon as he receives the new consignment at the start of the cycle. Owing to this fact, the present study investigates the impact of interest earned from revenue generated after fulfilling the stock out at the start of the cycle on a single commodity inventory model with shortages for deteriorating item, in which the whole lot goes through an inspection process on arrival before entering into inventory system, under the conditions of permissible delay in payments. After inspection, the non-defective items are retained to fulfill the demand and the defective items are returned to the supplier. The results have been demonstrated with the help of a numerical example using the tools of Matlab7.0.1. Chandra K. Jaggi University of Delhi, India Mandeep Mittal Amity School of Engineering and Technology, India