Abstract
Advertisement of the product is an important factor in inventory analysis. Also, price and stock have an important role to attract more customers in the competitive business situations. Trade credit policy is another important role in inventory analysis. We have combined these three factors together in a two-warehouse inventory model and represented it mathematically. In addition, we have added deteriorating factor of our proposed problem with price- and stock-dependent demand under partial backlogged shortage and solved. The frequency of advertisement is considered constant for a year in this paper. The proposed model is highly nonlinear in nature. Due to highly nonlinearity, we could not find the closed form solution. In this paper, trade credit facility is taken in the perspective of retailer, and all the possible cases and subcases of the model are discussed and solved using lingo 10.0 software. The results of sensitivity analysis prove the effectiveness of the proposed model.
Highlights
Inventories are the idle stock of physical goods having economic values and are held in various forms by an organization, like raw materials, work-in-process goods, finished goods waiting for packing or transportation or use or sale in future
Trade credit policy is another important role in inventory analysis
We have considered the frequency of advertisement is constant. We have developed this model under the following factors
Summary
Inventories are the idle stock of physical goods having economic values and are held in various forms by an organization, like raw materials, work-in-process goods, finished goods waiting for packing or transportation or use or sale in future. Bhunia et al (2015) have discussed two storage inventory models considering a demand which is dependent on time, selling price and frequency of advertisement with a single deteriorating item. Lashgari et al (2016) have focused on two-level trade credits in their model and presented a deteriorating-inventory model with shortage and backordered items, and at last, they were able to obtain an optimal solution. Shah and Cardenas-Barron (2015) have described an inventory model with cash discount facility, and derived the solution which helps retailer and supplier to take better decisions In this proposed model, a two-warehouse inventory model for deterioration item with trade credit policy approach with price- and stock-dependent demand under partial backlogged shortage is described. We have incorporated all of these factors into alternative trade credit policy
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