Annals of Operations Research

, Volume 259, Issue 1–2, pp 415–436 | Cite as

An EOQ model for decaying item with full advanced payment and conditional discount

Original Paper
First Online:

Abstract

The classic economic order quantity model assumes that purchasing cost should be paid immediately after the delivery time. In practice, sometimes the vendors ask the buyers to prepay the entire or a percentage of the purchasing cost before delivery time. In this paper the buyer’s inventory control system for a decaying item under full prepayment scheme based on various conditions consisting of (1) no shortage, (2) full backordering shortage is allowed and (3) partial lost sale is permitted, are developed. Numerical analysis is provided to show the performance of the model and some managerial insights are presented based on the proposed solution technique and sensitivity analysis.

Keywords

Inventory control Economic order quantity Decaying Shortage Full prepayment 
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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.School of Industrial Engineering, College of EngineeringUniversity of TehranTehranIran

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