An inventory model with shortage and exponential demand rate under Permissible delay in payments

Abstract

This study presents an inventory model for items with an exponential demand rate under a permissible delay in payments. Shortages are allowed and some properties are discussed. Mathematical models are derived under two different situations i.e. Case I: The permissible delay period is less than or equal to T ₁ for settling of the account, and Case II: The permissible delay period is greater than T₁ for settling of the total inventory cost. Finally, numerical examples demonstrate the applicability of the proposed model.

Keywords:

• pricing
• inventory
• shortage
• time-dependent demand
• permissible delay