An integrated inventory model for deteriorating items with price-dependent demand under two-level trade credit policy

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ABSTRACTThis article analyses an inventory system with two models for deteriorating items under two-level trade credit policy. In model I, the demand rate is influenced by both displayed stock and selling price. In model II, the demand rate depends on the selling price. In this work, a retailer who purchases the items enjoys a fixed credit period offered by his/her supplier and, in turn, also offers a credit period to his/her customers in order to promote the competition. We provide the necessary and sufficient conditions of the existence and uniqueness of the optimal solutions that could maximise the retailer's average profit per unit time. A numerical example is provided to illustrate and support the developed models.