Trade Credit Policy Between Supplier–Manufacturer–Retailer for Ameliorating/Deteriorating Items

  • Vandana Rai


This paper is related to the advancement of the inventory models for ameliorating items and focused on the real-life business situation as with the time the deterioration rate of ameliorating items is increased. In the global world, every supply chain entities as suppliers/manufacturers/retailers want to increase the consumption of their goods without any losses. For this, he/she tries to lure manufacturer/retailers by offering some discounts, i.e. credit period for settling the account. The problem states that the manufacturer purchases the ameliorating items from the supplier, where the supplier offers his/her credit period to settle the account. The manufacturer purchases ameliorating items (like pigs, fishes, ducklings, etc.) and take those items as raw material; when the livestock matures the manufacturer sells it to the retailer and offer credit time for settling the account. Reason to propose the model is when the quantities of livestock become larger, then the manufacturer faces difficulty in maintaining all the livestock. In such a situation, the traditional method (without offering credit period) fails to provide the maximum profit to the manufacturer. Therefore, in order to get maximum profit, the manufacturer needs some more realistic scientific outlook for making decisions. The proposed model provides a more realistic assumption of business markets, by offering credit policy. In the introduced model, manufacturer faces amelioration and deterioration rate simultaneously due to the growth and the death of livestock. The amelioration and deterioration rates are assumed as the Weibull distribution type. Shortages allowed only for the retailer, which is partially backlogged. The main goal of this paper is to minimize the total relevant inventory cost for both the manufacturer and the retailers, by finding the optimal replenishment policy. The mathematical formulation with optimal solutions for manufacturer and retailers are given. Convexity and existence of the proposed model via numerical examples and graphical representations are explained. Finally, the conclusions with some future research direction are discussed.


Inventory Weibull distribution deterioration Weibull distribution amelioration Partial backlogging Trade credit 

Mathematics Subject Classification




The author wishes to thank the editor and unknown referees, who have patiently gone through the article and whose suggestions have considerably improved its presentation and readability.


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Copyright information

© Operations Research Society of China, Periodicals Agency of Shanghai University, Science Press, and Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.School of Studies in MathematicsPt. Ravishankar Shukla UniversityRaipurIndia
  2. 2.Associated Cement Company (ACC) Jamulbehind ACC Ram MandirPost-Jamul, DurgIndia

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