Abstract
Khouja and Mehrez [Journal of Manufacturing Systems, Vol. 15 (1996), pp. 334–339] investigate the effect of supplier credit policy where credit terms are linked to the order quantity. However, they did not give a concrete proof to explain the correctness of the solution procedure to find the optimal solution of the average annual inventory cost function of supplier policy IV described in their paper. The main purpose of this paper wants to give an analytic method to extend and to demonstrate the validity of that solution procedure to find the optimal solution.
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