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Home  >  Volume 47 (July 2018)

12. AN INVENTORY MODEL FOR NON-INSTANTANEOUS DETERIORATING ITEM WITH TIME DEPENDENT QUADRATIC DEMAND UNDER TRADE CREDIT POLICY by B. Babangida1*and Y. M. Baraya Volume 47 (July, 2018 Issue), pp93 – 110
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AN INVENTORY MODEL FOR NON-INSTANTANEOUS DETERIORATING ITEM WITH TIME DEPENDENT QUADRATIC DEMAND UNDER TRADE CREDIT POLICY

B. Babangida1 and Y. M. Baraya

1Department of Mathematics and Computer Sciences, Umaru Musa Yar'adua University, 

Katsina, Nigeria.

2Department of Mathematics, Ahmadu Bello University, Zaria, Nigeria.

Abstract

This article develops an EOQ model for non-instantaneous deteriorating items under trade credit policy. The demand rate before deterioration sets in is assumed to be time dependent quadratic while the demand rate after deterioration sets in is constant as some customers are willing to buy after deterioration sets in. The model is developed on the assumption that the retailer is given some allowed period to settle for the goods supplied. This motivates retailers to order more which in turns lead higher turnover by the supplier. If the amount is settled before the end of trade credit period, the customer is paid interest by the supplier. If the amount is not settled by the end of trade credit period, the customer is charged interest by the supplier under the terms and conditions agreed upon. The main objective of this model is to determine the optimal cycle length and optimal ordering policy for retailer so as to minimise total variable cost. The necessary and sufficient conditions for the existence and uniqueness of the optimal solutions are also discussed. Some numerical examples are giving to show the applicability of the model. Finally, sensitivity analysis is carried out to show the effect of changes in some system parameters on optimal cycle length, order quantity and total variable cost.

Keywords: EOQ, Non- instantaneous deteriorating item, Quadratic demand. Permissible delay in payment.

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