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Production planning in a three-stock reverse-logistics system with deteriorating items under a periodic review policy
July  2016, 12(3): 1091-1119. doi: 10.3934/jimo.2016.12.1091

## An inventory control problem for deteriorating items with back-ordering and financial considerations under two levels of trade credit linked to order quantity

 1 School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran 2 Department of Mathematics, Bhangar Mahavidyalaya, Bhangar-743502, South 24 Parganas, India

Received  November 2014 Revised  May 2015 Published  September 2015

The paper deals with an inventory control problem for perishable items where two level credit periods depend on the order quantity over the finite time horizon. We assume that the supplier offers delay in payment on outstanding cost of purchasing goods to the retailer when purchasing amount is more than a fixed large amount. Moreover, the retailer offers a delay period to the customers for payment of their purchasing goods. In the inventory system, shortage is permitted and it is completely backordered.The net present value of the retailer's cost function, including costs of ordering, inventory holding, shortage, purchasing and other opportunities, is optimized. Then, an algorithm is proposed to determine the optimal values of order quantity, shortage quantity, number of cycles and the total cost of the system. Finally, a numerical example with sensitivity analysis of the key parameters is illustrated to show the applicability of the proposed model.
Citation: Mohsen Lashgari, Ata Allah Taleizadeh, Shib Sankar Sana. An inventory control problem for deteriorating items with back-ordering and financial considerations under two levels of trade credit linked to order quantity. Journal of Industrial & Management Optimization, 2016, 12 (3) : 1091-1119. doi: 10.3934/jimo.2016.12.1091
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