The optimal inventory policy for EPQ model under trade credit

Abstract

Huang and Huang [(2008), ‘Optimal Inventory Replenishment Policy for the EPQ Model Under Trade Credit without Derivatives International Journal of Systems Science, 39, 539–546] use the algebraic method to determine the optimal inventory replenishment policy for the retailer in the extended model under trade credit. However, the algebraic method has its limit of application such that validities of proofs of Theorems 1–4 in Huang and Huang (2008) are questionable. The main purpose of this article is not only to indicate shortcomings but also to present the accurate proofs for Huang and Huang (2008).

Keywords:

• EPQ
• EOQ
• inventory
• trade credit
• algebraic method