Non-instantaneous deteriorating items inventory models with fixed lifetime products under hybrid partial prepayment and trade credit in supply chain

Abstract

This paper investigates a non-instantaneous deteriorating inventory model with an expiration date and hybrid payment scheme under price-sensitive demand, and partial backlogged shortages. To facilitate post-Covid-19 recovery during the economic downturn, a hybrid payment scheme composed of multiple prepayments and a delay in payment is proposed. A time-dependent holding cost is also introduced. Apart from this, partial backlogged shortages of items are taken into consideration. From our literature search, the suggested approach is one of the first to adopt a hybrid payment method in light of the post-Covid-19 pandemic. The hybrid payment strategy with advanced and delayed payments was proposed to enhance business activities. The numerical examples illustrate how the above-suggested strategies affect the total profit of the enterprise. Sensitivity analysis is carried out to provide managerial insights to management during post-Covid-19 recovery.