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Retailers Optimal Credit Period and Ordering Policy for Non-instantaneous Deteriorating Items with Trapezoidal-Type Demand

Journal of Supply Chain Management Systems

Volume 7 Issue 2

Published: 2018
Author(s) Name: Mihir S. Suthar, Kunal T. Shukla | Author(s) Affiliation: PDPIAS, Charotar University of Science and Technology, Anand, Gujarat, India.
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Abstract

It has been observed that items like trendy goods, cellular phones, electronic toys and others have trapezoidal type demand pattern and have a short life cycle due to competitive products. As a result, to boost the demand of an item, retailer offers a credit period to the customers. This might lead to default risks for the retailer. Moreover, for such items, non-instantaneous deterioration is observed. In this article, an optimal credit period and ordering policy are presented for items having trapezoidal type demand rate depending upon credit period offered to the customers; having non-instantaneous deterioration and no shortages. The objective is to maximize total profit function for an inventory system. Model is supported with numerical examples and sensitivity analysis is carried out.

Keywords: Inventory System, Non-Instantaneous Deterioration, Trapezoidal Demand, Credit Period Policy.

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