OPTIMAL ORDERING POLICY FOR THE TIME DEPENDENT DETERIORATION WITH ASSOCIATED SALVAGE VALUE WHEN DELAY IN PAYMENTS IS PERMISSIBLE

In this research article, an attempt is made to develop mathematical model when units in inventory are subject to deterioration with time, and the supplier offers his retailer the credit period to settle the account of the procurement units. The salvage value is associated to the deterioration units. The objective is to minimize the retailer’s total inventory cost. An algorithm is proposed to find optimal ordering policy. A numerical example is given to study the effect of allowable credit period and deterioration on decision variable and the total cost of the retailer.

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