Open AccessAn EOQ model for deteriorating items analyzing retailer’s optimal strategy under trade credit and return policy with nonlinear demand and resalable returns
Author(s) -
Mamta Kumari,
Pijus Kanti De
Publication year - 2022
Publication title -
an international journal of optimization and control: theories and applications/e-an international journal of optimization and control: theories and applications
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.287
H-Index - 6
eISSN - 2146-5703
pISSN - 2146-0957
DOI - 10.11121/ijocta.2022.1025
Subject(s) - economic order quantity , trade credit , profit (economics) , order (exchange) , product (mathematics) , microeconomics , economics , perpetual inventory , inventory cost , demand curve , inventory management , econometrics , operations research , business , operations management , inventory theory , supply chain , mathematics , finance , marketing , geometry
This paper presents an EOQ model where demand is dependent upon time and selling price. In the proposed model of inventory, the retailer allows its unsatisfied customers to return their product whereas the manufacturer offers a full trade credit policy to the retailer. To make our model realistic, we have assumed that the product returned can be resold with the same selling price. Number of returns is a function of demand. In this proposed inventory model considering deterioration, the retailer does not fully reimburse its customers for the returned product. The primary purpose of this inventory model is to determine the optimal selling price, optimal order quantity, and optimal replenishment cycle length in order to maximize the retailer’s total profit earned per unit time. A numerical example is also presented and a sensitivity analysis is carried to highlight the findings of the suggested inventory model.