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An EOQ model for deteriorating items under supplier credits linked to ordering quantity. (English) Zbl 1046.90004

Summary: In the classical inventory economic order quantity (EOQ) model, it was assumed that the purchaser must pay for the items received immediately. However, in practices, the supplier usually is willing to provide the purchaser a permissible delay of payments if the purchaser orders a large quantity. As a result, in this paper, we establish an EOQ model for deteriorating items, in which the supplier provides a permissible delay to the purchaser if the order quantity is greater than or equal to a predetermined quantity. We then characterize the optimal solution and provide an easy-to-use algorithm to find the optimal order quantity and replenishment time. Finally, several numerical examples are given to illustrate the theoretical results.

MSC:

90B05 Inventory, storage, reservoirs
91B28 Finance etc. (MSC2000)
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