Integrated Inventory Policy for Deteriorating Items with Time Dependent Demand when Trade Credit is Offered

Abstract

Now-a-days to attract buyers, vendor uses promotional tool viz trade credit period which is considered to be the most beneficial policy. In this article an attempt is made to maximize the joint total profit of the supply chain with respect to buyer’s order quantity during a cycle time. A mathematical model for integrated inventory system is developed when demand rate linearly depends on time. By analyzing the total channel profit function, we developed some useful results to characterize the optimal solution and provided buyer’s order quantity, optimal special cycle time. The units in inventory are subject to constant deterioration. A numerical example is given to support the proposed model. The sensitivity analysis of model parameter is carried out. Managerial insights are also obtained.