Optimal Payment time for a Retailer with exponential demand under permitted credit period by the Wholesaler

Abstract

In paper Jamal et al.[32] developed a retailer’s model for optimal cycle time and payment times for a retailer’ in a deteriorating item inventory situation where a wholesaler allows a specified credit period to the retailer for payment without any charge. This paper is the extension of Jamal et al. [32] paper. In competitive business environment the most important objectives for companies is to reduce replenishment cost. This paper considers the inventory policy for non deteriorating items with exponential demand rate. The demand rate is assumed to be increasing function of time .In this study a retailer’s model for optimal cycle time and optimal payment times for a retailer have been developed, where a supplier allows a particular credit period to the buyer for payment without any extra charge. The supplier and buyer system is modeled as a optimal profit problem to determine the optimal payment time under different parameters under the same condition. The numerical technique method is used to solve the problem for finding optimal payment time and optimal inventory cycle time. The results are discussed with the help of sensitivity analysis of the optimal solution with respect to the different parameters of the system is given.