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The EOQ Model for Deteriorating Items with a Conditional Trade Credit Linked to Order Quantity in a Supply Chain System

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  • Kun-Jen Chung

    (College of Business, Chung Yuan Christian University, Chung Li 320314, Taiwan
    Department of Industrial Management, National Taiwan University of Science and Technology, Taipei 10607, Taiwan)

  • Jui-Jung Liao

    (Department of Business Administration, Chihlee University of Technology, Banqiao District, New Taipei City 22050, Taiwan)

  • Hari Mohan Srivastava

    (Department of Mathematics and Statistics, University of Victoria, Victoria, BC V8W 3R4, Canada
    Department of Medical Research, China Medical University Hospital, China Medical University, Taichung 40402, Taiwan
    Department of Mathematics and Informatics, Azerbaijan University, 71 Jeyhun Hajibeyli Street, Baku AZ1007, Azerbaijan
    Section of Mathematics, International Telematic University Uninettuno, I-00186 Rome, Italy)

  • Shih-Fang Lee

    (Department of Applied Mathematics, Chung Yuan Christian University, Chung Li 320314, Taiwan)

  • Shy-Der Lin

    (Department of Applied Mathematics and Business Administration, Chung Yuan Christian University, Chung Li 320314, Taiwan)

Abstract

For generality, we observed that some of the optimization methods lack the mathematical rigor and some of them are based on intuitive arguments which result in the solution procedures being questionable from logical viewpoints of a mathematical analysis such as those in the work by Ouyang et al. (2009). They consider an economic order quantity model for deteriorating items with partially permissible delays in payments linked to order quantity. Basically, their inventory models are interesting, however, they ignore explorations of interrelations of functional behaviors (continuity, monotonicity properties, differentiability, et cetera) of the total cost function to locate the optimal solution, so those shortcomings will naturally influence the implementation of their considered inventory model. Consequently, the main purpose of this paper is to provide accurate and reliable mathematical analytic solution procedures for different scenarios that overcome the shortcomings of Ouyang et al.

Suggested Citation

  • Kun-Jen Chung & Jui-Jung Liao & Hari Mohan Srivastava & Shih-Fang Lee & Shy-Der Lin, 2021. "The EOQ Model for Deteriorating Items with a Conditional Trade Credit Linked to Order Quantity in a Supply Chain System," Mathematics, MDPI, vol. 9(18), pages 1-28, September.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:18:p:2311-:d:638768
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    References listed on IDEAS

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    1. Mei-Chuan Cheng & Hui-Chiung Lo & Chih-Te Yang, 2023. "Optimizing Pricing, Pre-Sale Incentive, and Inventory Decisions with Advance Sales and Trade Credit under Carbon Tax Policy," Mathematics, MDPI, vol. 11(11), pages 1-18, May.
    2. Beatrice Marchi & Lucio E. Zavanella & Simone Zanoni, 2023. "Supply chain finance for ameliorating and deteriorating products: a systematic literature review," Journal of Business Economics, Springer, vol. 93(3), pages 359-388, April.

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