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An inventory model under linked-to-order hybrid partial advance payment, partial credit policy, all-units discount and partial backlogging with capacity constraint

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  • Khan, Md. Al-Amin
  • Shaikh, Ali Akbar
  • Cárdenas-Barrón, Leopoldo Eduardo

Abstract

A profit maximizing economic order quantity (EOQ) model is studied under linked-to-order hybrid prepayment and delay payment scheme considering the practical scenario that the capacity of the retailer's own warehouse (OW) is limited. Shortages are allowed which are accumulated partially during the stock out period. The main objective is to decide whether a rented warehouse (RW) is needed to obtain the optimal ordering and replenishment policies for a retailer. The closed-form optimal solutions are found examining all possible cases and an algorithm is constructed to achieve the global optimal solutions for the retailer. Finally, some management insights are drawn by observing the applicability of the developed algorithm and also by performing sensitivity analyses on different parameters.

Suggested Citation

  • Khan, Md. Al-Amin & Shaikh, Ali Akbar & Cárdenas-Barrón, Leopoldo Eduardo, 2021. "An inventory model under linked-to-order hybrid partial advance payment, partial credit policy, all-units discount and partial backlogging with capacity constraint," Omega, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:jomega:v:103:y:2021:i:c:s030504832100027x
    DOI: 10.1016/j.omega.2021.102418
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    References listed on IDEAS

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    2. Majed G. Alharbi, 2022. "Carbon Reduction Technology Based on Imperfect Production System for Deteriorating Items with Warranty Periods and Greenness Dependent Demand," Sustainability, MDPI, vol. 14(22), pages 1-16, November.
    3. Beatriz Abdul-Jalbar & Roberto Dorta-Guerra & José M. Gutiérrez & Joaquín Sicilia, 2021. "Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives," Mathematics, MDPI, vol. 9(15), pages 1-25, July.
    4. Ghiami, Yousef, 2023. "An analysis on production and inventory models with discounted cash-flows," Omega, Elsevier, vol. 117(C).
    5. Khan, Md. Al-Amin & Cárdenas-Barrón, Leopoldo Eduardo & Treviño-Garza, Gerardo & Céspedes-Mota, Armando, 2023. "Installment for advance payment and pricing decisions for an inventory system under power demand pattern and all-units discount," International Journal of Production Economics, Elsevier, vol. 265(C).
    6. Cao, Yunzhi & Zhu, Xiaoyan & Yan, Houmin, 2022. "Data-driven Wasserstein distributionally robust mitigation and recovery against random supply chain disruption," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 163(C).

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