Optimal Procurement Policy With Trade Credit Financing, Capacity Constraints and Stock-dependent Demand
نویسندگان
چکیده
In this paper, optimum procurement policy is worked out when trade credit is offered to the retailer by the supplier and demand is stock-dependent. The own warehouse (OW) capacity is limited and excess inventory is stored in rented warehouse (RW). The rented warehouse has modern infra-structure facility. Hence, the unit holding cost in rented warehouse is assumed to be higher than that in the owned warehouse. A decision rule is constructed to hire a rented warehouse or not. The uniqueness of the optimal solution is discussed. The numerical examples are presented to validate the proposed problem. The managerial insights are deduced using sensitivity analysis. It is observed that the retailer should stock more and increase time for a higher ordering cost. On the other hand, lower ordering cost facilitates the retailer to go for owned warehouse only. Keywords Inventory, EOQ, stock-dependent demand, two-warehouse, trade credit.
منابع مشابه
An EPQ Model with Increasing Demand and Demand Dependent Production Rate under Trade Credit Financing
This paper investigates an EPQ model with the increasing demand and demand dependent production rate involving the trade credit financing policy, which is seldom reported in the literatures. The model considers the manufacturer was offered by the supplier a delayed payment time. It is assumed that the demand is a linear increasing function of the time and the production rate is proportional to ...
متن کاملA credit policy approach in a two-warehouse inventory model for deteriorating items with price- and stock-dependent demand under partial backlogging
Advertisement of the product is an important factor in inventory analysis. Also, price and stock have an important role to attract more customers in the competitive business situations. Trade credit policy is another important role in inventory analysis. We have combined these three factors together in a two-warehouse inventory model and represented it mathematically. In addition, we have added...
متن کاملOptimal Ordering Policy with Stock-Dependent Demand Rate Under Retailer’s Two Stages Trade Credit Financing Using Discounted Cash Flow (DCF) Approach
Email: [email protected] Abstract: Many researchers have assumed one stage trade credit financing. In this study, we considered two levels of trade credit policy using Discounted Cash Flow (DCF) approach. Demand rate is considered to be stock-dependent for the first level (credit demand) and constant for second level (cash demand). Mathematical models are derived under two differen...
متن کاملOptimal Ordering Policy with Stock-Dependent Demand Rate under Permissible Delay in Payments
We develop an inventory model to determine optimal ordering policy under permissible delay in payment by considering demand rate to be stock dependent. Mathematical models are derived under two different cases: credit period being greater than or equal to cycle time for settling the account, and credit period being less than or equal to cycle time for settling the account. The results are illus...
متن کاملOptimal replenishment and credit policy in supply chain inventory model under two levels of trade credit with time- and credit-sensitive demand involving default risk
Traditional supply chain inventory modes with trade credit usually only assumed that the up-stream suppliers offered the down-stream retailers a fixed credit period. However, in practice the retailers will also provide a credit period to customers to promote the market competition. In this paper, we formulate an optimal supply chain inventory model under two levels of trade credit policy with d...
متن کامل