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Inflationary Induced EOQ Model for Weibull Distribution Deterioration and Trade Credits

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Abstract

In any business transaction the constant unit price assumption is not true. The tendency in inflationary environment is to buy more in order to reduce the total system cost, which may be true in certain situations but it is not true when consumption rate of items is dependent on initial stock level since buying more quantity under inflationary environment leads to more consumption resulting in higher total system cost. The model developed in this paper helps to determine optimum ordering quantity for stock dependent consumption rate items under inflationary environment with infinite replenishment rate without permitting shortages. The effect of the inflation rate, deterioration rate, Initial-stock-dependent consumption rate and delay in payment are discussed. This study develops an inventory model for constant demand rate and time dependent deterioration rate with delay in payment is discussed. In this study mathematical model are also derived under two different cases. Case-I: The credit period is less then cycle time T; and Case-II: Credit period is greater than cycle time T. This study will proposes an inventory model under a situation in which the supplier provides the purchaser a permissible delay of payments if the purchaser orders a large quantity. Numerical example is given to support the purposed model. Mathematica 7.0 is used for numerical solutions.

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Authors and Affiliations

  1. Department of Mathematics, Graphic Era University, Dehradun, UK, India

    R. P. Tripathi

  2. Department of Mathematics, JB Institute of Technology, Dehradun, UK, India

    Sandeep Kumar Chaudhary

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  1. R. P. Tripathi
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  2. Sandeep Kumar Chaudhary
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Correspondence to Sandeep Kumar Chaudhary.

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Tripathi, R.P., Chaudhary, S.K. Inflationary Induced EOQ Model for Weibull Distribution Deterioration and Trade Credits. Int. J. Appl. Comput. Math 3, 3341–3353 (2017). https://doi.org/10.1007/s40819-016-0298-9

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