Inventory control model for fresh agricultural products on Weibull distribution under inflation and delay in payment

Abstract

PurposeThe purpose of this paper is to research the influence of inflation and delay in payment on the inventory model on Weibull distribution and present a new method of inventory control model for fresh agricultural products.Design/methodology/approachThe previous researches deal with the inventory problems. However, these researches are based on deteriorating industrial products, so that the method for inventory model of agricultural products should be employed. According to agricultural products characteristics, the model assumes that deterioration is defined as fixed and demand is taken as Weibull distribution. An optimal order quantity and the minimum inventory total cost are formulated and solved under inflation and delay in payment.FindingsThe minimum inventory total cost and the optimal ordering quantity are convex with the length of the period with positive stock. When the delay period is longer than the length of the period with positive stock, the minimum inventory total cost and the optimal ordering quantity increase with permissible delay in payment increase and decrease with inflation rate increase, changing steeply with inflation rate and increasing permissible delay.Research limitations/implicationsThe market demand of fresh agricultural products is on two‐parameter Weibull distribution.Practical implicationsThe paper gives useful advice for agricultural supply chain managers.Originality/valueThe paper presents a new method of inventory control for fresh agricultural products.