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Optimal Policy for EOQ Model with Two Level of Trade Credits in One Replenishment Cycle

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DOI: 10.4236/ajor.2012.21006    4,908 Downloads   9,274 Views Citations

ABSTRACT

In general, a supplier/retailer frequently offer trade credit to stimulate their respective sales. The main purpose of this paper is to investigate the optimal supplier/retailer’s replenishment decisions under two levels of trade credit policy within the economic order quantity (EOQ) framework. This paper deals with the supplier/retailer’s inventory replenishment problem under two levels of trade credit in one replenishment cycle. A different approach of two levels of trade credit is used, which give more freedom to the supplier/retailer in business. In addition, the easy-to-use procedure is developed to efficiently find the optimal cycle time for the retailer under minimizing annual total relevant cost. Finally, a numerical example is given to illustrate these results.

Cite this paper

A. Sharma, R. Goel and N. Dua, "Optimal Policy for EOQ Model with Two Level of Trade Credits in One Replenishment Cycle," American Journal of Operations Research, Vol. 2 No. 1, 2012, pp. 51-58. doi: 10.4236/ajor.2012.21006.

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