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Inventory lot-size policies for deteriorating items with expiration dates, advance payments and shortages under trade credit

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  • R. Uthayakumar
  • S. Tharani

Abstract

For deteriorating items with seasonal demand, it is assumed that the payment will be made to the supplier in three consignments such as a fraction of acquisition cost is prepaid and the remaining cost is divided into two payments. This paper provides a better bound for both vendor and buyer and also more beneficial for both retailer and buyer which do not concern the status of the member. The model is derived under three different circumstances depending on the time of occurrence of shortages, credit period and cycle time. We then characterise the optimal replenishment cycle time and optimal total cost by providing the theorem and lemmas. Finally we run numerical examples to illustrate the problem and provide some managerial insights.

Suggested Citation

  • R. Uthayakumar & S. Tharani, 2019. "Inventory lot-size policies for deteriorating items with expiration dates, advance payments and shortages under trade credit," International Journal of Services and Operations Management, Inderscience Enterprises Ltd, vol. 34(1), pages 111-140.
    • Handle: RePEc:ids:ijsoma:v:34:y:2019:i:1:p:111-140
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    Cited by:

    1. Ali Akbar Shaikh & Leopoldo Eduardo Cárdenas-Barrón & Amalesh Kumar Manna & Armando Céspedes-Mota & Gerardo Treviño-Garza, 2021. "Two Level Trade Credit Policy Approach in Inventory Model with Expiration Rate and Stock Dependent Demand under Nonzero Inventory and Partial Backlogged Shortages," Sustainability, MDPI, vol. 13(23), pages 1-19, December.

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