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Optimal ordering policy under order-size dependent trade credit and complete backlogging derived algebraically

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  • Chandan Mahato

    (Sidho-Kanho-Birsha University)

  • Gour Chandra Mahata

    (Sidho-Kanho-Birsha University)

Abstract

The retail inventory management literature generally assumes that suppliers offer their retailers a full delay in payment in order to stimulate demand. However, this may not always be offered in real-life business environments. To account for the possibility of partial delay in payment, we establish an economic order quantity (EOQ) model with allowable shortage and partial permissible delay in payment linked to order quantity. The formation of payment scheme is as follows: if the order quantity $$Q$$ Q reaches a certain level $$({Q}_{d})$$ ( Q d ) then fully permissible trade credit is possible, otherwise the partial trade credit is offered. Here, we discuss all the possible cases of the trade credit when $$Q

Suggested Citation

  • Chandan Mahato & Gour Chandra Mahata, 2023. "Optimal ordering policy under order-size dependent trade credit and complete backlogging derived algebraically," OPSEARCH, Springer;Operational Research Society of India, vol. 60(1), pages 420-444, March.
    • Handle: RePEc:spr:opsear:v:60:y:2023:i:1:d:10.1007_s12597-022-00614-z
    DOI: 10.1007/s12597-022-00614-z
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    References listed on IDEAS

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