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Optimal Policies for Deteriorating Items with Maximum Lifetime and Two-Level Trade Credits

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  • Nita H. Shah
  • Dushyantkumar G. Patel
  • Digeshkumar B. Shah

Abstract

The retailer’s optimal policies are developed when the product has fixed lifetime and also the units in inventory are subject to deterioration at a constant rate. This study will be mainly applicable to pharmaceuticals, drugs, beverages, and dairy products, and so forth. To boost the demand, offering a credit period is considered as the promotional tool. The retailer passes credit period to the buyers which is received from the supplier. The objective is to maximize the total profit per unit time of the retailer with respect to optimal retail price of an item and purchase quantity during the optimal cycle time. The concavity of the total profit per unit time is exhibited using inventory parametric values. The sensitivity analysis is carried out to advise the decision maker to keep an eye on critical inventory parameters.

Suggested Citation

  • Nita H. Shah & Dushyantkumar G. Patel & Digeshkumar B. Shah, 2014. "Optimal Policies for Deteriorating Items with Maximum Lifetime and Two-Level Trade Credits," International Journal of Mathematics and Mathematical Sciences, Hindawi, vol. 2014, pages 1-5, April.
    • Handle: RePEc:hin:jijmms:365929
    DOI: 10.1155/2014/365929
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    References listed on IDEAS

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    Cited by:

    1. Janssen, Larissa & Claus, Thorsten & Sauer, Jürgen, 2016. "Literature review of deteriorating inventory models by key topics from 2012 to 2015," International Journal of Production Economics, Elsevier, vol. 182(C), pages 86-112.
    2. Tai, Allen H. & Xie, Yue & He, Wanhua & Ching, Wai-Ki, 2019. "Joint inspection and inventory control for deteriorating items with random maximum lifetime," International Journal of Production Economics, Elsevier, vol. 207(C), pages 144-162.

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