Mathematics and Statistics Vol. 8(5), pp. 596 - 609
DOI: 10.13189/ms.2020.080515
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Probabilistic Inventory Model under Flexible Trade Credit Plan Depending upon Ordering Amount

Piyali Mallick ^1,*, Lakshmi Narayan De ^2
1 Department of Mathematics, Government General Degree College, Kharagpur-II, West Bengal, India
² Department of Mathematics, Haldia Govt. College, Haldia, West Bengal, India

ABSTRACT

In this work, we propose a stochastic inventory model under the situations that delay in imbursement is acceptable. Most of the inventory model on this topic supposed that the supplier would offer the retailer a fixed delay period and the retailer could sell the goods and accumulate revenue and earn interest with in the credit period. They also assumed that the trade credit period is independent of the order quantity. Limited investigators developed EOQ model under permissible delay in payments, where trade credit is connected with the order quantity. When the order quantity is a lesser amount of the quantity at which the delay in payment is not permitted, the payments for the items must be made immediately. Otherwise, the fixed credit period is permitted. However, all these models were completely deterministic in nature. In reality, this trade credit period cannot be fixed. If it is fixed, then retailer will not be interested to buy higher quantity than the fixed quantity at which delay in payment is permitted. To reflect this situation, we assumed that trade credit period is not static but fluctuates with the ordering quantity. The demand throughout any arrangement period follows a probability distribution. We have calculated the total variable cost for every unit of time. The optimum ordering policy of the scheme can be found with the aid of three theorems (proofs are provided). An algorithm to determine the best ordering rule with the assistance of the propositions is established and numerical instances are provided for clarification. Sensitivity investigation of all the parameters of the model is presented and deliberated. Some previously published results are special cases of the consequences gotten in this paper.

KEYWORDS
Probabilistic Inventory Model, Trade Credit, Permissible Delay in Payments

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Piyali Mallick , Lakshmi Narayan De , "Probabilistic Inventory Model under Flexible Trade Credit Plan Depending upon Ordering Amount," Mathematics and Statistics, Vol. 8, No. 5, pp. 596 - 609, 2020. DOI: 10.13189/ms.2020.080515.

(b). APA Format:
Piyali Mallick , Lakshmi Narayan De (2020). Probabilistic Inventory Model under Flexible Trade Credit Plan Depending upon Ordering Amount. Mathematics and Statistics, 8(5), 596 - 609. DOI: 10.13189/ms.2020.080515.