Economic Order Quantity Under Constant Demand , Preservation, Trade Credit And Shortages Of Non-Instantaneous Deteriorating Items

Abstract

In this paper, an Economic order quantity (EOQ) is proposed for an inventory model , integrating constant demand for non-instantaneous deteriorating items with dual trade credit policy, preservation techniques and shortages . Preservation investment reduces the rate of deterioration of products and maximizes the retailers profit. Dual trade credit policy allows the retailer to receive a permissible and interest free period of credit from the supplier and offers the similar benefit to the customer. Shortages are allowed and assumed to be completely backlogged. Theorems are proved analytically to maximize the total profit , supported with numerical illustrations and sensitivity analysis. The findings highlight that optimal balancing of preservation cost with credit policy enhances profit considerably.