Establishment of EOQ (Economic Order Quantity) Model for Spoilage Products and Power Demand Under Permissible Delay in Payments
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The demand for a service is the amount of it that a consumer will purchase or will be ready to purchase at different prices at a given moment of time. An EOQ model for spoilage commodities and power demand under trade credits is established. Mathematical model is established to obtain optimal ordering policies for policies for retailer under two different cases. In this model buyer who purchases the commodities enjoy a fixed period offered by his/her vendor. We show that total profit function is concave with respect to time. We then provide for finding maximum profit. Numerical examples are provided of the optimal solution to find order quantity and total profit. Sensitivity analysis of the key parameters is presented to validate the model.
KeywordsInventory Power demand Deterioration Trade credits Optimal
Author would like to acknowledge the Editor-in Chief of the journal and referees for their encouragement and constructive comments in revising the paper.
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