Inventory policy of a deteriorating item with variable demand under trade credit period |
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| Affiliation: | 1. Department of Mathematics, Vidyasagar University, Midnapore, Paschim-Medinipur 721102, West Bengal, India;2. Department of Mathematics, Mahishadal Raj College, Mahishadal, Purba-Medinipur 721628, West Bengal, India;1. Department of Management Sciences, Tamkang University, Tamsui, New Taipei City 25137, Taiwan;2. Department of Business Administration, Ming Chuan University, Taipei 11103, Taiwan;3. Department of Hospitality Management, Tungnan University, New Taipei City 22202, Taiwan;4. Department of Industrial Management, Chien Hsin University of Science and Technology, Taoyuan 320, Taiwan;1. School of Economics and Management, Qingdao University of Science & Technology, 99 Songling Rd., Laoshan Dist., Qingdao 266061, PR China;2. School of Economics and Management, Beihang University, 37 Xueyuan Rd., Haidian Dist., Beijing 100191, PR China;3. Department of Economics and Management, Institute of Disaster Prevention Science and Technology, Sanhe 065201, PR China;1. Department of Business Administration, Soochow University, 56 Section 1, Kuei-yang Street, Taipei, 10048, Taiwan;2. Department of Mathematics, School of Advanced Sciences, Vellore Institute of Technology, Vellore, 632014, India;3. Institute of Innovation and Circular Economy, Asia University, Taiwan;4. Department of medical research, China medical university Hospital, China medical university, Taiwan;1. Department of Industrial and Systems Engineering, School of Engineering and Sciences, Tecnológico de Monterrey, E. Garza Sada 2501 Sur, C.P. 64849 Monterrey, Nuevo León, Mexico;2. Department of Mathematics, The University of Burdwan, Burdwan 713104, India;3. Department of Operational Research, Faculty of Mathematical Sciences, New Academic Block, University of Delhi, Delhi 110007, India;4. The Logistics Institute-Asia Pacific, National University of Singapore, 21 Heng Mui Keng Terrace, #04-01, Singapore 119613, Singapore;5. BNSF Railway Company, 2650 Lou Menk Drive, Fort Worth, TX 76131-2830, USA |
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| Abstract: | In this paper, an inventory model of a deteriorating item with stock and selling price dependent demand under two-level credit period has been developed. Here, the retailer enjoys a price discount if he pays normal purchase cost on or before the first level of credit period, or an interest is charged for the delay of payments. In return, retailer also offers a fixed credit period to his customers to boost the demand. In this regard, the authors develop an EOQ model incorporating the effect of inflation and time value of money over all the costs. Keeping the business of seasonal products in mind, it is assumed that planning horizon of business is random and follows a normal distribution with a known mean and standard deviation. The model is formulated as retailer’s profit maximization problem for both crisp and fuzzy inventory costs and solved using a modified Genetic Algorithm (MGA). This algorithm is developed following fuzzy age based selection process for crossover and gradually reducing mutation parameter. For different values of MGA parameters, optimum results are obtained. Numerical experiments are performed to illustrate the model. |
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| Keywords: | EOQ model Variable demand Two level trade credit Random planning horizon Genetic algorithm |
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