Supply Chain Scheduling Using an EOQ Model for a Two-Stage Trade Credit Financing with Dynamic Demand

Abstract

The effective supply chain scheduling is a crucial task in business management which can be determined by developing the optimum schedules. Here, this paper develops the optimum schedules using an EOQ model with dynamic demand pattern because in this era of globalization and dynamic environment the Economic Order Quantity (EOQ) model loses its importance when it is based upon the constant demand pattern. Therefore, it becomes indispensable to develop the EOQ model under an environment of dynamic demand pattern. Here, the dynamic demand pattern includes the relevant parameters which varies with time. The effects of such parameters are necessary to incorporate in determining the optimum schedules and hence the optimum inventory levels. Also, to establish a product in the market and to increase its customer base one can take the help of promotional efforts in the form of trade credit financing. This paper discusses the optimum scheduling for a part of supply chain system using an EOQ model where the demand is dynamic varies with time and one of the promotional effort in the form of a two-stage trade credit is considered. The applicability of the model can be well understood through the sensitivity analysis of the parameters and its managerial implications.