Probabilistic order level system with lead time when delay in payments are permissible
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The probabilistic order level inventory model with lead time when shortages are permitted is developed whe supplier allows some credit periodT * for setting the accounts for the purchase quantity. The scheduling periodT is known. Mathematical models are derived for both the cases: i)T *≤T and ii)T *>T. Expressions are derived for average expected total cost of the system and for obtaining optimum order levelZ=Z 0 under each case.
KeywordsLead Time Inventory Model Sales Revenue Schedule Period Order Level
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