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Title: The effect of advance payment with discount facility on supply decisions of deteriorating products whose demand is both price and stock dependent
Authors: Khan, Md. Al-Amin
Shaikh, Ali Akbar
Panda, Gobinda Chandra
Konstantaras, Ioannis
Cárdenas-Barrón, Leopoldo Eduardo
Type: Article
Subjects: FRASCATI::Natural sciences::Mathematics
Issue Date: May-2020
Source: International Transactions in Operational Research
Volume: 27
Issue: 3
First Page: 1343
Last Page: 1367
Abstract: Generally, in the business world, it is observed that suppliers give different kinds of benefits to retailers due to advance payment. One of the popular benefits is instant cash discount due to advance payment. If a retailer pays off his total purchase cost before receiving the products, then he receives a certain percentage of cash discount instantly. However, if the retailer pays off a certain fraction of the total purchasing cost, then price discount is given only at the time of receiving the products while paying the remaining amount of the total purchasing cost. Using this concept, this paper formulates, under both cases of advance payment (full or partial), an inventory model for deteriorating products where shortages are allowed and demand function is considered as price and stock dependent. The closed-form solutions for each case are presented and two numerical examples are solved. In addition, a sensitivity analysis is also performed to show the effects of advance payment with discount facility.
ISSN: 0969-6016
Other Identifiers: 10.1111/itor.12733
Appears in Collections:Department of Business Administration

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