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An Inventory Policy for Maximum Fixed Life-Time Item with Back Ordering and Variable Demand Under Two Levels Order Linked Trade Credits

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Decision Making in Inventory Management

Part of the book series: Inventory Optimization ((IO))

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Abstract

In this chapter, an inventory policy of the item with maximum fixed life-time is studied where two levels of trade credit depend on the order quantity. We consider the inventory system in which the supplier is ready to give a mutually agreed credit period to the retailer only if the order quantity purchased by the retailer is larger than the predetermined order quantity. Moreover, to be more practical, the retailer offers a credit limit to the customers. Here, price and time-sensitive demand are debated under the inflationary environment over the finite time horizon. In this study, the shortage is allowed and it is fully backordered. The main objective is to maximize the total profit of the retailer to the fraction of the replenishment cycle and the number of replenishments during the planning horizon. The model is supported by numerical examples. Sensitivity analysis is carried out to derive insights for decision-makers.

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Author information

Authors and Affiliations

  1. Department of Applied Sciences, Faculty of Engineering and Technology, Parul University, Vadodara, Gujarat, 391760, India

    Mrudul Y. Jani

  2. Department of Mathematics, Gujarat University, Ahmedabad, Gujarat, 380009, India

    Nita H. Shah

  3. Government Polytechnic Dahod, Dahod, Gujarat, 389151, India

    Urmila Chaudhari

Authors
  1. Mrudul Y. Jani
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  2. Nita H. Shah
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  3. Urmila Chaudhari
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Editor information

Editors and Affiliations

  1. University of Gujarat, Ahmedabad, Gujarat, India

    Nita H. Shah

  2. Amity University Uttar Pradesh, Noida, Uttar Pradesh, India

    Mandeep Mittal

  3. Department of Industrial and Systems Engineering, Tecnológico de Monterrey, Monterrey, Mexico

    Leopoldo Eduardo Cárdenas-Barrón

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Jani, M.Y., Shah, N.H., Chaudhari, U. (2021). An Inventory Policy for Maximum Fixed Life-Time Item with Back Ordering and Variable Demand Under Two Levels Order Linked Trade Credits. In: Shah, N.H., Mittal, M., Cárdenas-Barrón, L.E. (eds) Decision Making in Inventory Management. Inventory Optimization. Springer, Singapore. https://doi.org/10.1007/978-981-16-1729-4_5

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