Optimal replenishment policies for EOQ inventory model with limited storage capacity under permissible delay in payments

Abstract

The main purpose of this paper wants to investigate the effect of trade credit policy with limited storage capacity within the economic order quantity (EOQ) framework. Goyal is frequently cited when the inventory systems under conditions of permissible delay in payments are discussed. But Goyal assumed that the retailer’s storage capacity is unlimited. This assumption is debatable. So, we want to extend Goyal’s model to the case that the retailer’s storage capacity is limited. Then, two theorems present solution procedures to locate the optimal cycle times of the annual total relevant cost function. In essence, the inventory model discussed in this paper generalizes that of Goyal. Finally, numerical examples are given to illustrate all theorems obtained in this paper.