Optimal Retailer's Ordering Policies in the EOQ Model for Deteriorating Items under Trade Credit Financing in Supply Chain

Abstract

This paper deals with the problem of determining the optimal retailer's replenishment decisions for deteriorating items under two levels of trade credit policy within the economic order quantity (EOQ) framework to reflect the supply chain management situation. We investigate the retailer's inventory system as a cost minimization problem to determine the retailer's optimal inventory policy under the supply chain management. At first, this paper shows that there exists a unique optimal cycle time to minimize the total variable cost per unit time. Then, a theorem is developed to determine the optimal ordering policies for the retailer. For determination of optimal ordering policies, with the help of theorems, we have developed necessary algorithms. We deduce some previously published results of other researchers as special cases. Finally, numerical examples are given to illustrate the theorems. Then, as well as, we obtain a lot of managerial insights from numerical examples.