A TWO ECHELON SUPPLY CHAIN INVENTORY MODEL FOR A DETERIORATING ITEM WHEN DEMAND IS TIME AND CREDIT SENSITIVE

Year 2017, Issue: 17 , 82 - 97 , 01.07.2017

Santanu Kumar Ghosh

https://izlik.org/JA43JS96PD

Abstract

Abstaract−While formulating inventory models with trade credit facilities, most of the inven- tory modelers so far assumed that the up-stream suppliers offer the down-stream retailers a fixed credit period. However, some times the retailers also provide a credit period to the end customers to promote the market competition. In the present paper, a supply chain inventory model of a deteriorating item has been formulated under two levels of trade credit policy, namely by the sup- pliers to the retailers and also by the retailers to the end customers with default risk consideration. In the proposed model, it has been assumed the demand is dependent linearly on time as well as on credit facility offered by the retailers. The model is solved analytically to find the retailer’s optimal credit period and optimal cycle time which maximizes the total average profit. The solution of the model is illustrated with the help of a numerical example. The sensitivity of the optimal solution is also carried out with respect to the changes to the different system parameters

Keywords

−Inventory , Deterioration , Time and trade credit dependent demand , Supply chainmanagement