Abstract
Since the value of money changes with time, it is necessary to take account of the influence of time factor in making the replenishment policy. In this study, to investigate the influence of the time value of money to the inventory strategy, an inventory system for deteriorating items with stock-dependent demand is investigated under two levels of trade credit. The method to efficiently determine the optimal cycle time is presented. Numerical examples are provided to demonstrate the model and the method.
Highlights
In real market to stimulate retailer’s ordering qualities the supplier allows a certain fixed permissible delay in payment, which is trade credit, to settle the amount
Chang et al (2010b) investigated the DCF approach to establish an inventory model for deteriorating items with trade credit based on the order quantity
Liao and Huang (2010) extended the inventory model to consider the factors of two levels of trade credit, deterioration and time discounting
Summary
In real market to stimulate retailer’s ordering qualities the supplier allows a certain fixed permissible delay in payment, which is trade credit, to settle the amount. Chang et al (2010b) investigated the DCF approach to establish an inventory model for deteriorating items with trade credit based on the order quantity. Chung and Lin (2011) used the DCF approach for the analysis of the inventory model for trade credit in economic ordering policies of deteriorating items.
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