Integrated imperfect production inventory model under permissibledelay in payments depending on the order quantity

Chui-Yu Chiu; Ming-Feng Yang; Chung-Jung Tang; Yi Lin

doi:10.3934/jimo.2013.9.945

Article Contents

2013, Volume 9, Issue 4: 945-965. Doi: 10.3934/jimo.2013.9.945

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Integrated imperfect production inventory model under permissible delay in payments depending on the order quantity

1.
Department of Industrial Engineering and Management, National Taipei University of Technology, No.1, Sec. 3, Chung-Shiao E. Rd., Taipei, Taiwan 10643
2.
Department of Transportation Science, National Taiwan Ocean University, 2 Pei-Ning Road, Keelung, Taiwan 20224
3.
College of Management, National Taipei University of Technology, No.1, Sec. 3, Chung-Shiao E. Rd., Taipei, Taiwan 10643

Received: August 31, 2011

Revised: October 31, 2012

Published: September 2013

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Abstract

The aim of this paper is to develop an improved inventory model which helps the enterprises to advance their profit increasing and cost reduction in a single vendor-single buyer environment with permissible delay in payments depending on the ordering quantity and imperfect production. Through this study, some numerical examples available in the literature are provided herein to apply the permissible delay in payments depending on the ordering quantity strategy. Furthermore, imperfect products will cause the cost and increase number of lots through the whole model. Therefore, for more closely conforming to the actual inventories and responding to the factors that contribute to inventory costs, our proposed model can be the references to the business applications. Finally, results of this study showed applying the permissible delay in payments can promote the cost reduction; and also showed a longer trade credit term can decrease costs for the complete supply chain.

Keywords:

Integrsted inventory,
permissible delay in payments depending on the ordering quantity,
imperfect production,
strategy of inventory.

Mathematics Subject Classification: 90B05, 90B30, 90B38.

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