An Optimization Model for Buyer-Supplier Co-Ordination Under Limited Warehouse Space and Incremental Price Discount

Sahabuddin Sarwardi

doi:https://doi.org/10.14445/22315373/IJMTT-V55P574

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 55 | Number 8 | Year 2018 | Article Id. IJMTT-V55P574 | DOI : https://doi.org/10.14445/22315373/IJMTT-V55P574

An Optimization Model for Buyer-Supplier Co-Ordination Under Limited Warehouse Space and Incremental Price Discount

Sahabuddin Sarwardi

Citation :

Sahabuddin Sarwardi, "An Optimization Model for Buyer-Supplier Co-Ordination Under Limited Warehouse Space and Incremental Price Discount," International Journal of Mathematics Trends and Technology (IJMTT), vol. 55, no. 8, pp. 567-580, 2018. Crossref, https://doi.org/10.14445/22315373/IJMTT-V55P574

Abstract

This paper considers incremental price discount, limited warehouse space and payments delay. It is often seen that when a retailer purchases products for which supplier offers incremental price discounts. In Goyel [1] investigated the inventory replenishment problem under condition of payments delay, where he assumed that: (i) The unit selling price and unit purchasing price are equal (ii) The retailer starts paying higher interest charges on the items in stocks and returns money of the remaining balance immediately when the items are sold (iii) Retailer warehouse space is unlimited. Here we consider that unit purchasing price are not constant but buyer has taken advantage of offering incremental price discount given by supplier. It is assumed that the buyer will borrow total purchasing cost from the bank to pay off the account, buyer must pay the amount of purchasing cost to the supplier at the end of trade credit period. This also assumed that the buyer’s storage space is limited. Numerical examples are given to illustrate results obtained in of the present study.

Keywords

Inventory, Production, Optimization, Price setting, Quantity discount, Lim- ited Warehouse space, Payments delay.

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