tailieunhanh - An inventory model for deteriorating items under the condition of permissible delay in payments

In economic order quantity (EOQ) models, it is often assumed that the payment of an order is made on the receipt of items by the inventory system. In this paper, a varying rate of determination and the condition of permissible delay in payments used in conjunction with the economic order quantity model are the focus of discussion. Numerical examples are presented to illustrate the proposed models. | Yugoslav Journal of Operations Research 12 (2002), Number 1, 73-84 AN INVENTORY MODEL FOR ITEMS MS FOR DETERIORATING ITE UNDER THE CONDITION OF PERMISSIBLE DELAY IN PAYMENTS Horng-Jinh CHANG, Chung-Yuan DYE Department of Management Sciences, Tamkang University Tamsui, Taipei, Taiwan, . Bor-Ren CHUANG Electronics Systems Division, Chung-Shan Institute of Science & Technology Lung-Tan, Tao-Yuan, Taiwan, . Abstract: In economic order quantity (EOQ) models, it is often assumed that the payment of an order is made on the receipt of items by the inventory system. However, such an assumption is not quite practical in the real world. Under most market behaviours, it can be easily found that a vendor provides a credit period for buyers to stimulate demand. In this paper, a varying rate of determination and the condition of permissible delay in payments used in conjunction with the economic order quantity model are the focus of discussion. Numerical examples are presented to illustrate the proposed models. Keywords: Inventory, EOQ, deterioration. 1. INTRODUCTION In the literature of inventory theory, deteriorating inventory models have been continually modified so as to accommodate the more practical features of real inventory systems. Ghare and Schrader [1] were the first to address problems with a constant demand and a deterioration rate. Since this introduction, a lot of studies such as Covert and Philip [2], Philip [3], Misra [4], Tadikamalla [5], Dave and Patel [6], Hariga [7], Chen [8], Chakrabarty et al. [9], Bhunia and Maiti [10], and Chang and Dye [11] have been made on deteriorating inventory control. On the other hand, in the developed mathematical models, it is often assumed that payment will be made to the vendor for the goods immediately after receiving the consignment. As pointed out by Aggarwal and Jaggi [12], a permissible delay in 74 . Chang, . Dye, . Chuang / An Inventory Model for Deteriorating Items payments can be .