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Optimization and Inventory Management pp 1–19Cite as

Economic Production Quantity (EPQ) Inventory Model for a Deteriorating Item with a Two-Level Trade Credit Policy and Allowable Shortages

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Abstract

This research work derives an economic production quantity (EPQ) model, and in order to make it a bit close to reality, the stockout is allowed, and this is completely backordered. In addition to this feature, it is incorporated a two-level credit scheme when both supplier and retailer are giving a delay in payment to their respective customers with the aim of enhancing the sales. The inventory model is modeled as a constrained nonlinear optimization problem, and this is resolved by the generalized reduced gradient method (GRG). Moreover, to exemplify and certify the inventory model, five instances are given and solved. Finally, a sensitivity analysis is made for studying the influence of variations of input parameters, modifying one parameter and maintaining the others at their initial input values.

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Author information

Authors and Affiliations

  1. Department of Mathematics, The University of Burdwan, Burdwan, 713104, India

    Ali Akbar Shaikh

  2. Department of Industrial and Systems Engineering, School of Engineering and Sciences, Tecnológico de Monterrey, E. Garza Sada 2501 Sur, C.P. 64849, Monterrey, Nuevo León, Mexico

    Leopoldo Eduardo Cárdenas-Barrón

  3. The Logistics Institute - Asia Pacific, National University of Singapore, 21 Heng Mui Keng Terrace, Singapore, 119613, Singapore

    Sunil Tiwari

Authors
  1. Ali Akbar Shaikh
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  2. Leopoldo Eduardo Cárdenas-Barrón
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  3. Sunil Tiwari
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Corresponding author

Correspondence to Leopoldo Eduardo Cárdenas-Barrón .

Editor information

Editors and Affiliations

  1. Department of Mathematics, Gujarat University, Ahmedabad, India

    Nita H. Shah

  2. Department of Mathematics, Amity Institute of Applied Sciences, Amity University, Noida, India

    Mandeep Mittal

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Shaikh, A.A., Cárdenas-Barrón, L.E., Tiwari, S. (2020). Economic Production Quantity (EPQ) Inventory Model for a Deteriorating Item with a Two-Level Trade Credit Policy and Allowable Shortages. In: Shah, N., Mittal, M. (eds) Optimization and Inventory Management. Asset Analytics. Springer, Singapore. https://doi.org/10.1007/978-981-13-9698-4_1

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