Optimizing a Supply-chain Inventory Model Having Price and Stock-dependent Demand Under Supplier Credits and Cash Discount Policy
Year: 2025
Type: article
Abstract: Traditional Economic Order Quantity (EOQ) models assume that payment for goods is made immediately upon delivery.However, suppliers often offer two key incentives simultaneously: (1) a payment delay to captivate new customers and increase sales, and (2) a cash discount to encourage prompt disbursement and diminish credit costs.This paper develops an optimal supply-chain inventory model for deteriorating goods with price and stock-dependent demand, incorporating a constant deterioration rate, under both trade credit and cash discount policies.The model assumes no shortages and considers the salvage value of deteriorated units.Our objective is to minimize costs in a scenario where the supplier provides both a financial discount and a permissible payment delay.We formulate a mathematical model and propose a solution approach in both crisp and fuzzy contexts.Numerical examples, analyzed using Mathematica 13.0.1 software, validate our findings and demonstrate the convexity of the overall cost function.Additionally, a sensitivity analysis of key parameters is conducted to provide valuable managerial insights for inventory managers.
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4412656270