The optimal retailer's ordering policies for deteriorating items with limited storage capacity under trade credit financing [An article from: International Journal of Production Economics]

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Description:
Under permissible delay in payments, all previously published models implicitly assumed that the supplier would offer the retailer a delay period, but the retailer would not offer the trade credit period to his/her customer. Huang [2003. Journal of the Operational Research Society 54, 1011-1015] developed a retailer's replenishment model to reflect the real-life situations by assuming that the retailer also adopts the trade credit policy to stimulate his/her customer demand. In Huang's model, it is assumed that the goods are not perishable and the storage capacity is unlimited. Based upon the above argument, we propose a two-warehouse inventory model for deteriorating items under permissible delay in payments. Three theorems are developed to determine the optimal cycle time and numerical examples are given to illustrate these theorems. Finally, the results in this paper generalize the results presented by Huang [2003. Journal of the Operational Research Society 54, 1011-1015].