Abstract
In this paper, we propose an inventory model under two-level trade credit policy, where the supplier offers quantity discounts and allows the retailer to choose the period of delay in payments that determines the unit purchasing cost, and so retailer’s unit purchasing cost is a function of both ordering quantity and his/her allowed credit period. Furthermore, the demand function is relevant to the credit period offered by the retailer to his/her customers. Our objective here is to maximize the retailer’s total profit per unit time by solving the optimal decision on ordering quantity and two credit periods. An effective algorithm is developed to determine the optimal solution to the problem. Numerical examples are provided to illustrate the impact of the model parameters on the optimal solutions. © 2014, Springer Science+Business Media New York.
| Original language | English |
|---|---|
| Pages (from-to) | 833-852 |
| Journal | Journal of Global Optimization |
| Volume | 62 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 25 Aug 2015 |
| Externally published | Yes |
Bibliographical note
Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].Research Keywords
- Delay in payments
- Inventory
- Quantity discounts
- Two-level trade credit policy
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