An EOQ inventory model with stock dependent demand under permissible delay in payment

Abstract

The present paper focuses on an economic order quantity (EOQ) inventory model for deteriorating items having stock dependent demand when delay in payment is permissible. The deteriorating items follow constant deterioration rate. Shortages are allowed and are completely backlogged. The mathematical models are also derived under two circumstances: Case 1: the permissible delay period is less than or equal to the shortage time point for settling the account and Case 2: the permissible delay period is greater than the shortage time point for settling the account. Numerical examples are provided to illustrate the effectiveness of the proposed methods and solution procedure. Furthermore, sensitivity analysis of the various parameters is carried out and some interesting managerial insights are presented.