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Optimal Policy for EOQ Model with Two Level of Trade Credits in One Replenishment Cycle

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Author(s): Amit Sharma | Ruchi Goel | Naresh Kumar Dua

Journal: American Journal of Operations Research
ISSN 2160-8830

Volume: 02;
Issue: 01;
Start page: 51;
Date: 2012;
Original page

Keywords: EOQ Model; Inventory; Two Levels of Trade Credit | Replenishment Cycle

ABSTRACT
In general, a supplier/retailer frequently offer trade credit to stimulate their respective sales. The main purpose of this paper is to investigate the optimal supplier/retailer’s replenishment decisions under two levels of trade credit policy within the economic order quantity (EOQ) framework. This paper deals with the supplier/retailer’s inventory replenishment problem under two levels of trade credit in one replenishment cycle. A different approach of two levels of trade credit is used, which give more freedom to the supplier/retailer in business. In addition, the easy-to-use procedure is developed to efficiently find the optimal cycle time for the retailer under minimizing annual total relevant cost. Finally, a numerical example is given to illustrate these results.

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