Optimal strategy for an EOQ model with noninstantaneous receipt and exponentially deteriorating items under permissible delay in payments

Abstract

This paper explores an inventory system with noninstantaneous receipt for deteriorating items under conditions of permissible delay in payments. The noninstantaneous receipt model for deteriorating items under trade credit is newly introduced. The purpose of this paper is to determine the optimal replenishment policies of an inventory model for deteriorating items under conditions of noninstantaneous receipt and permissible delay in payments. We present an easy analytical closed-form solution to find the optimal order quantity, order cycle and order receipt period so that the total relevant cost per unit time is minimized. Finally, through numerical examples, a sensitivity analysis shows the influence of the key model parameters.

Keywords:

• EOQ model
• EPQ model
• inventory
• deteriorating items
• trade credit
• permissible delay in payment