Optimal Ordering Policy for Deteriorating Items with Price and Credit Period Sensitive Demand under Default Risk

Dhir Singh; Amit Kumar

doi:https://doi.org/10.14445/22315373/IJMTT-V51P551

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 51 | Number 6 | Year 2017 | Article Id. IJMTT-V51P551 | DOI : https://doi.org/10.14445/22315373/IJMTT-V51P551

Optimal Ordering Policy for Deteriorating Items with Price and Credit Period Sensitive Demand under Default Risk

Dhir Singh, Amit Kumar

Abstract

In this paper, an inventory model for deteriorating items with selling price and credit period sensitive demand is developed. The default risk associated with sales revenue of the retailer is also taken into consideration. Here, shortages are allowed and partially backlogged. To make the study close to reality, the holding cost is considered as a time dependent function. This study provides a procedure to develop the total retailer’s profit function per unit time of the system and optimal ordering quantity per cycle for the retailer. Finally, the model is illustrated with a numerical example and to study the effect of changes of different system parameters on the total retailer’s profit per unit time of the system, sensitivity analysis is performed by changing one parameter at a time and preserving the other parameters at their original values.

Keywords

Inventory, deterioration, price and credit period sensitive demand, and default risk.

References

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Citation :

Dhir Singh, Amit Kumar, "Optimal Ordering Policy for Deteriorating Items with Price and Credit Period Sensitive Demand under Default Risk," International Journal of Mathematics Trends and Technology (IJMTT), vol. 51, no. 6, pp. 371-376, 2017. Crossref, https://doi.org/10.14445/22315373/IJMTT-V51P551