An inventory model with imperfect items, stock dependent demand and permissible delay in payments under inflation
RAIRO - Operations Research - Recherche Opérationnelle, Volume 50 (2016) no. 3, pp. 473-489.

This paper develops an economic ordering quantity (EOQ) model with stock dependent demand and imperfect items under the effect of inflation and time value of money. In this model, the lifetime of a defective item follows a Weibull distribution and the imperfect items are reworked at a cost to become the perfect one. In this article, the model is considered with finite replenishment rate under progressive payment scheme within the cycle time and the retailer is allowed a trade-credit offer by the supplier to buy more items. During the credit period, the retailer can earn more by selling their products. The interest on purchasing cost is charged for the delay of payment by the retailer. The objective of this model is to minimize the total inventory cost of the retailer by finding the optimal cycle length and the optimal order quantity. Numerical examples are given to demonstrate the results. Sensitivity analysis of the model with respect to several system parameters has been carried out and the implications are discussed in detail.

Received:
Accepted:
DOI: 10.1051/ro/2015028
Classification: 90B05
Keywords: Imperfect items, stock dependent demand, permissible delay in payments, inflation
Palanivel, M. 1; Uthayakumar, R. 1

1 Department of Mathematics, The Gandhigram Rural Institute – Deemed University, Gandhigram, 624 302 Dindigul, Tamil Nadu, India
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Palanivel, M.; Uthayakumar, R. An inventory model with imperfect items, stock dependent demand and permissible delay in payments under inflation. RAIRO - Operations Research - Recherche Opérationnelle, Volume 50 (2016) no. 3, pp. 473-489. doi : 10.1051/ro/2015028. http://archive.numdam.org/articles/10.1051/ro/2015028/

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