Abstract

Businesses that want to strike a balance between financial efficiency and customer happiness face the complex and crucial challenge of effective inventory management in the face of items that are deteriorating and susceptible to time- and price-dependent demand. This paper investigates an innovative financial method that uses trade credit to address this problem. The goal is to identify the ideal order quantity and replenishment intervals that balance meeting client demand with reducing overall costs. The model takes into consideration seasonality and price fluctuations when considering degrading goods subject to fluctuating demand patterns. Generally, we study inventory models with constant demand. In this model, we assume that demand is a function of time and selling price, allows for shortages, and assumes a constant deterioration rate of inventory items. Demand is affected by selling price if the price varies significantly with time. The objective of the model is to minimize the overall costs when demand is affected by the selling price with time. The paper presents a methodology to determine the optimal solution. The research introduces an efficient algorithm to obtain the optimal solution. The proposed model is validated through a numerical example. Conducting sensitivity analysis allows us to investigate the impact of different parameters on the optimal solution.

Author

Sanjeev Kumar, Jaivindra Tomar  ( Pages 65-84 )
Email:sanjeevkumarbsr56@gmail.com
Affiliation:Department of Mathematics, DAV College, Bulandshahr, Uttar Pradesh, India      DOI: https://doi.org/10.58517/IJSE.2023.2202

Keyword

Trade Credit; Multivariate demand; Shortage

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