Journal
APPLIED MATHEMATICAL MODELLING
Volume 34, Issue 11, Pages 3273-3285Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.apm.2010.02.019
Keywords
Inventory; Deteriorating items; Trade credit; Stock-dependent demand
Funding
- Natural Science Foundation of China [70771034, 70971041, 70631003]
- Foundation of Ministry of Education of China [20060359007]
- Institutions of Higher Education in Anhui Province of China [KJ2010A063]
- Doctoral Science Foundation of Anhui University of Architecture of China
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Previous inventory models under permissible delay in payments usually assumed that the demand of the items was either constant or merely dependent on the retailing price. This paper develops a lot-sizing model for deteriorating items with a current-stock-dependent demand and delay in payments. In the model, a retailer who purchases the items enjoys a fixed credit period offered by his/her supplier and, in turn, also offers a credit period to his/her customers in order to promote the market competition. We provide the necessary and sufficient conditions of the existence and uniqueness of the optimal solutions that could maximize the retailer's average profit per unit time. Some properties of the optimal solutions are shown to find the optimal ordering policies of the considered problem. Numerical examples and sensitive analysis of the major parameters are presented to illustrate the developed model. (C) 2010 Elsevier Inc. All rights reserved.
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