Learning Effect on Stock-policies with Imperfect Quality and Deteriorating Items under Trade Credit

Abstract

Listen

Translate article

In reality, the learning effect is a phenomenon which occurs almost every where in which, the employees executing a new task will perform better eventually after fluent reiterations. The learning effect acts as a considerable function for cost reduction and maximizing the profit. The basic concept of the EOQ model is that 100% of the articles in an ordered lot are of good quality but this concept is not practically justifiable for the production process owing to product deterioration and related factors. The objective of this paper is to exhibit as to what will be the influence of trade credit financing on the ordered quantity as well as on the corresponding profit derived from the deteriorating items with imperfect quality under the learning effect. Trade-credit financing is an efficacious policy for industrial businesses to formulate selling strategies and increase their sales in order to earn more profits within the specified limits. Keeping in mind such a concept, this paper investigates the inventory model for retailers dealing with imperfect quality and deteriorating items with credit financing under the learning effect. This model optimizes the ordered quantity by maximizing the total profit and in order to exhibit as to what will be the trade credit financing's influence on the ordered quantity as well as on the corresponding profit, it deals with imperfect quality deteriorating items too under the learning effect. Mathematical models for the same have been verified with the help of numerical examples. Conclusively, sensitive analysis has been presented.