Comment on ‘Optimal inventory replenishment policy for the EPQ model under trade credit derived without derivatives’

Abstract

In this article, we complement the shortcoming of the inventory economic production quantity (EPQ) model developed by Huang and Huang (2008), ‘Optimal Inventory Replenishment Policy for the EPQ Model Under Trade Credit Derived Without Derivatives’, International Journal of Systems Science, 39, 539–546), and propose an arithmetic–geometric inequality method to obtain the global optimal solution without taking complex differential calculus or using tedious algebraic manipulations. Finally, we provide an economical interpretation of the theoretical result so that the reader can understand the insight of the result.

Keywords:

• inventory
• trade credits
• arithmetic mean
• geometric mean
• finance
• EOQ models
• convex optimisation