Optimal Replenishment and Payment Policies for Deteriorating Inventory Model with Price-Sensitive Trapezoidal Demand under Biddable Two-Part Trade Credit

摘要

In general, researchers analyzing inventory models under two-part trade credit considered that the buyer either pays full purchase cost during the pre-specified credit period and take the advantage of cash discount or settles the account within a longer allowable credit period at the regular purchase price. In this paper, we model decision policies when buyer may pay part of purchase cost within a permissible shorter credit period and gets a cash discount in purchase cost and then the remaining account is settled within the longer permissible credit period. The demand rate is considered to be price-sensitive trapezoidal and units in inventory are subject to constant rate of deterioration. An algorithm is proposed to compute the optimal retail price, cycle time and biddable fraction of payments to be paid which maximizes the decision maker’s profit per unit time. Numerical examples are given to illustrate the proposed problem. It is observed that the buyer is beneficial under biddable two-part trade credit scenario as compared to either not paying anything within shorter credit period or paying in full within longer permissible credit period.