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Optimisation of pricing and ordering under the two-stage credit policy for deteriorating items when the end demand is price and credit period sensitive

Optimisation of pricing and ordering under the two-stage credit policy for deteriorating items... The supplier offers a credit period to the retailer for settling account against the purchases made. But this credit period is not passed by the retailer to the customer which is termed as one-stage credit policy. However, in business, the retailer offers credit period to his customers to stimulate their demand. Such a situation where both supplier as well as retailer offers the credit period to their respective customers is known as two-stage credit policy. In this research article, the demand of an item is assumed to be a function of credit period and sale price offered by the retailer to the customers. The units in inventory are subject to constant rate of deterioration. A flow-chart is given to decide the retailer's optimal decision policy. The results have been validated by a numerical example. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Business Performance and Supply Chain Modelling Inderscience Publishers

Optimisation of pricing and ordering under the two-stage credit policy for deteriorating items when the end demand is price and credit period sensitive

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1758-9401
eISSN
1758-941X
DOI
10.1504/IJBPSCM.2009.030643
Publisher site
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Abstract

The supplier offers a credit period to the retailer for settling account against the purchases made. But this credit period is not passed by the retailer to the customer which is termed as one-stage credit policy. However, in business, the retailer offers credit period to his customers to stimulate their demand. Such a situation where both supplier as well as retailer offers the credit period to their respective customers is known as two-stage credit policy. In this research article, the demand of an item is assumed to be a function of credit period and sale price offered by the retailer to the customers. The units in inventory are subject to constant rate of deterioration. A flow-chart is given to decide the retailer's optimal decision policy. The results have been validated by a numerical example.

Journal

International Journal of Business Performance and Supply Chain Modelling – Inderscience Publishers

Published: Jan 1, 2009

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