ECONOMIC ORDER QUANTITY MODEL FOR DETERIORATING ITEMS WITH TRADE CREDIT FINANCING AND RAMP TYPE DEMAND UNDER SHORTAGES

Abstract

In this paper an inventory model is developed for ramp type dependent demand rate with the trade credit period. The shortages are allowed which is partially backlogged in the presented model. It is observed the effect of deterioration rate and different conditions of permissible delay period are discussed here. The mathematical models and cost functions for three different conditions based on permissible delay period and available money at the time of payment are derived. With the help of numerical example an optimal cost and ordering quantity are computed. A sensitivity analysis with respect to different associated system parameters have also been carried out to check the stability of the model. The numerical example shows that the model is applicable in real life situations.