Retailer's optimal policy under inflation in fuzzy environment with trade credit

Abstract

Trade credit plays an important role in financing many industries. In the classical inventory model it is assumed that the buyer must pay for the items as soon as the items are received. In this problem, it is considered that the retailer can pay the supplier either at the end of the credit period or later pay interest on the unpaid amount for the overdue period. Here, the retailer's inventory model for the optimal cycle time and payment time for a retailer is developed. The effects of the inflation rate, deterioration rate and delay in payment have been discussed. The whole study is performed in a fuzzy environment by taking the opportunity cost, interest earned and interest paid rate as a triangular fuzzy number. Fuzzy profit functions, which involve fuzzy arithmetic operation, are defined using the function principle. We use the signed distance method to defuzzify the fuzzy profit function. Moreover, numerical and sensitivity analysis is performed to validate the proposed model.

Keywords:

• trade credit
• signed distance
• inflation
• inventory model
• imprecise cost

Additional information

Notes on contributors

Dharmendra Yadav

Dharmendra Yadav is an assistant professor in Keshav Mahavidyalaya, University of Delhi, Delhi (India). He is pursing Ph.D. in inventory control from the CCS University. He has had his articles accepted/published in journals, such as Opsearch, Asia-Pacific Journal of Operational Research, and others.

S.R. Singh

S.R. Singh received his M.Sc. and M.Phil. in mathematics. He holds a Ph.D. in inventory management and is supervising several Ph.D. scholars. He has several published research papers to his credit in journals like Opsearch, Yugoslav Journal of Operations Research, International Journal of Operational Research, Asia-Pacific Journal of Operational Research and others. He is currently working as an associate professor in the Department of Mathematics at D.N. (P.G.) College, Meerut, UP, India.

Rachna Kumari

Rachna Kumari is an M.Sc. and an M.Phil. in mathematics. She has also been a JRF and SRF with the Council of Scientist and Industrial Research, New Delhi, India. She holds a Ph.D. in reliability and is supervising several research scholars for the degree of PhD. She has published many research papers in national and international journals such as Control and Cybernetics, International Journal of Procurement Management, Opsearch, International Journal of Operational Research, Asia-Pacific Journal of Operational Research and others. She is currently working as an associate professor in the Department of Mathematics at Meerut College, Meerut, UP, India.