Abstract
This paper is devoted to the study of the effects of payment terms on the replenishment strategy. We use a discounting approach with Poisson demand, a linear inventory carrying cost and a very short replenishment lead time. The case of repeated identical payments at the end of a specified period of t days, as well as the case of a one time longer payment period of u days, are taken into consideration. In both situations we are able to develop rules to determine the appropriate replenishment quantities. We show how these rules change depending on whether the goods provided are subject to oudating or not. Numerical and graphical illustrations are provided.
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