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This paper considers the problem of dynamic decision-making for an inventory model for deteriorating items under price inflation and permissible delay in payment. In this paper, we adopt an iso-elastic and selling price dependent demand function to model the finite time horizon inventory for deteriorating items. The stocks deteriorate physically at a constant fraction of the on-hand inventory. The objective of this paper is to determine the optimal retail price, number of replenishments, and the cycle time under two different credit periods so that the net profit is maximized. We discuss the optimization properties and develop an algorithm for solving the problem based on dynamic programming techniques. Numerical examples are presented to illustrate the validity of the optimal control policy, and sensitivity analysis on major parameters is performed to provide more managerial insights into deteriorating items. [ABSTRACT FROM AUTHOR]

Abstract: This paper investigates the economic order quantity (EOQ) — based inventory model for a retailer under two levels of trade credit to reflect the supply chain management situation in the fuzzy sense. It is assumed that the retailer maintains a powerful position and can obtain the full trade credit offered by the supplier yet the retailer just offers a partial trade credit to customers. The demand rate, holding cost, ordering cost, purchasing cost and selling price are taken as fuzzy numbers. Under these conditions, the retailer can obtain the most benefits. Study also investigates the retailer’s inventory policy for deteriorating items in a supply chain management situation as a cost minimization problem in the fuzzy sense. The annual total variable cost for the retailer in fuzzy sense is defuzzified using Graded Mean Integration Representation method. Then the present study shows that the defuzzified annual total variable cost for the retailer is convex, that is, a unique solution exists. Mathematical theorems and algorithms are developed to efficiently determine the optimal inventory policy for the retailer. Numerical examples are given to illustrate the theorems and the algorithms. Finally, the results in this paper generalize some already published results in the crisp sense. [Copyright &y& Elsevier]