Periodic review ( s , S ) inventory model with permissible delay in payments
Authors:
- 1 February 2004
- journal article
- review article
- Published by Taylor & Francis in Journal of the Operational Research Society
- Vol. 55 (2) , 147-159
Abstract
This paper investigates the effect of permissible delay in payments on ordering policies in a periodic review (s, S) inventory model with stochastic demand. A new mathematical model is developed, which is an extension to that of Veinott and Wagner (Mngt Sci 1965; 11: 525) who applied renewal theory and stationary probabilistic analysis to determine the equivalent average cost per review period. The performance of the model is validated using a custom-built simulation programme. In addition, two distribution-free heuristic methods of reasonable accuracy develop approximate optimal policies for practical purposes based only on the mean and the standard deviation of the demand. Numerical examples are presented with results discussed.Keywords
This publication has 34 references indexed in Scilit:
- Economic order quantity of deteriorating items under permissible delay in paymentsComputers & Operations Research, 1998
- A theorem on the determination of economic order quantity under conditions of permissible delay in paymentsComputers & Operations Research, 1998
- Determining optimal retail price and lot size under day-terms supplier creditComputers & Industrial Engineering, 1997
- An ordering policy for deteriorating items with allowable shortage and permissible delay in paymentJournal of the Operational Research Society, 1997
- Retailer's pricing and lot sizing policy for exponentially deteriorating products under the condition of permissible delay in paymentsComputers & Operations Research, 1997
- Joint price and lot size determination under conditions of permissible delay in payments and quantity discounts for freight costEuropean Journal of Operational Research, 1996
- Ordering Policies of Deteriorating Items under Permissible Delay in PaymentsJournal of the Operational Research Society, 1995
- An optimal credit policy to increase supplier's profits with price-dependent demand functionsProduction Planning & Control, 1995
- Economic Order Quantity under Conditions of Permissible Delay in PaymentsJournal of the Operational Research Society, 1985
- Inventory Policy and Trade Credit FinancingManagement Science, 1973