On reserve money for an EOQ model in an inflationary environment under supplier credits.

Richa Jain, S.R. Singh

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We propose to derive a deterministic inventory model for a stock with time-varying deterioration rate with a linear trend in demand over a finite planning horizon in this study. We assume that the supplier offers a credit limit to the retailer during which there is no interest charged. However, the retailer has the reserve capital with him to make the payments at the beginning of the transaction, but he decides to take the benefit of the credit limit. Each cycle has shortages, which have been partially backlogged to suit present day competition in the market. Also, the whole study has been done in an inflationary environment using the Discounted Cash Flow (DCF) approach to impart economic feasibility to the model. Numerical examples have been presented to explain the theory, while sensitivity of the optimal solution of the system has been studied with respect to various system parameters.
Original languageEnglish
Pages (from-to)303-320
JournalOpsearch
Volume46
DOIs
Publication statusPublished - 2009
Externally publishedYes

Fingerprint

EOQ model
Retailers
Credit
Suppliers
Shortage
Payment
Optimal solution
Deterioration
Time-varying
Inventory model
Economics
Discounted cash flow
Planning

Keywords

  • Infation
  • Supplier credit
  • Reserve money
  • INVENTORY

Cite this

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title = "On reserve money for an EOQ model in an inflationary environment under supplier credits.",
abstract = "We propose to derive a deterministic inventory model for a stock with time-varying deterioration rate with a linear trend in demand over a finite planning horizon in this study. We assume that the supplier offers a credit limit to the retailer during which there is no interest charged. However, the retailer has the reserve capital with him to make the payments at the beginning of the transaction, but he decides to take the benefit of the credit limit. Each cycle has shortages, which have been partially backlogged to suit present day competition in the market. Also, the whole study has been done in an inflationary environment using the Discounted Cash Flow (DCF) approach to impart economic feasibility to the model. Numerical examples have been presented to explain the theory, while sensitivity of the optimal solution of the system has been studied with respect to various system parameters.",
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On reserve money for an EOQ model in an inflationary environment under supplier credits. / Jain, Richa; Singh, S.R.

In: Opsearch, Vol. 46, 2009, p. 303-320.

Research output: Contribution to journalArticleScientificpeer-review

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AU - Singh, S.R.

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AB - We propose to derive a deterministic inventory model for a stock with time-varying deterioration rate with a linear trend in demand over a finite planning horizon in this study. We assume that the supplier offers a credit limit to the retailer during which there is no interest charged. However, the retailer has the reserve capital with him to make the payments at the beginning of the transaction, but he decides to take the benefit of the credit limit. Each cycle has shortages, which have been partially backlogged to suit present day competition in the market. Also, the whole study has been done in an inflationary environment using the Discounted Cash Flow (DCF) approach to impart economic feasibility to the model. Numerical examples have been presented to explain the theory, while sensitivity of the optimal solution of the system has been studied with respect to various system parameters.

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