Title: Inventory model for optimal pricing and ordering policies under two-level trade credits

Authors: Vinti Dhaka; Sarla Pareek; Chandra K. Jaggi

Addresses: Department of Mathematics and Statistics, Banasthali University, Banasthali, Rajasthan 304022, India ' Department of Mathematics and Statistics, Banasthali University, Banasthali, Rajasthan 304022, India ' Department of Operation Research, Faculty of Mathematical Sciences, University of Delhi, Delhi 110007, India

Abstract: In this article, an inventory problem with constant demand under the two-level trade financing is discussed in which supplier offers credit period M to retailer and retailer gives credit period N to his customers. The main focus of this paper is on to maximise the total profit per unit time of the retailer with respect to pricing and ordering. The problem with constant demand is discussed. The paper is divided in to two cases (Case 1: M ≥ N, Case 2: M ≤ N). A decision rule for the retailers is suggested to maximise the total profit per unit time. An attempt is made to develop a model when the supplier offers a fixed credit period to the retailer and retailer also offers credit period to the customers which is a more practical case in the market.

Keywords: inventory; two-level trade credit (M, N); cycle length.

DOI: 10.1504/IJPM.2017.086400

International Journal of Procurement Management, 2017 Vol.10 No.5, pp.555 - 567

Received: 14 Mar 2016
Accepted: 20 Jul 2016
Published online: 10 Sep 2017 *

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