Title: Optimal order quantity and credit period for a time-dependent deteriorated green item under two-level trade credit with reminder cost: a new approach

Authors: Gautam Kumar; Sukhendu Bera; Guruprasad Samanta; Manoranjan Maiti

Addresses: Indian Institute of Engineering Science and Technology, Shibpur Howrah – 711103, WB, India ' National Institute of Technology, Durgapur – 713209, India ' Indian Institute of Engineering Science and Technology, Shibpur Howrah – 711103, WB, India ' Vidyasagar University, Paschim Medinipur – 721102, West Bengal, India

Abstract: Nowadays, people prefer to buy green products. In the present competitive market, the wholesalers and retailers offer trade credit to their downstream customers. Against retailers' offers, some customers become defaulters. In rural India, money lenders engage some people to remind the defaulters for payment. Following this idea, we introduce reminder costs in trade-credited systems to reduce default risk, though this system negatively affects the demand. Along with the conventional approach, a new approach for a two-level trade-credited EOQ model with a time-dependent deteriorated green item is presented, solving default risk and reminder cost by using the generalised reduced gradient method through LINGO 19.0. The new approach gives better results than the conventional ones, and in both approaches, the introduction of reminder cost gives more profit. The nature of profit and its dissection concerning decision variables are presented. Some managerial decisions are derived.

Keywords: inventory? two-level trade credit? deterioration? default risk? reminder cost? new approach.

DOI: 10.1504/IJMOR.2024.136864

International Journal of Mathematics in Operational Research, 2024 Vol.27 No.1, pp.75 - 104

Received: 24 Jun 2022
Accepted: 04 Jul 2022
Published online: 23 Feb 2024 *