EOQ Model for Deteriorating Items with Exponential Time Dependent Demand Rate under Inflation When Supplier Credit Linked to Order Quantity

Abstract

In paper (2004) Chang studied an inventory model under a situation in which the supplier provides the purchaser with a permissible delay of payments if the purchaser orders a large quantity. Tripathi (2011) also studied an inventory model with time dependent demand rate under which the supplier provides the purchaser with a permissible delay in payments. This paper is motivated by Chang (2004) and Tripathi (2011) paper extending their model for exponential time dependent demand rate. This study develops an inventory model under which the vendor provides the purchaser with a credit period; if the purchaser orders large quantity. In this chapter, demand rate is taken as exponential time dependent. Shortages are not allowed and effect of the inflation rate has been discussed. We establish an inventory model for deteriorating items if the order quantity is greater than or equal to a predetermined quantity. We then obtain optimal solution for finding optimal order quantity, optimal cycle time and optimal total relevant cost. Numerical examples are given for all different cases. Sensitivity of the variation of different parameters on the optimal solution is also discussed. Mathematica 7 software is used for finding numerical examples.