Credit policy for an inventory model of a deteriorating item having variable demand considering default risk

Document Type : Research Article

Authors

1 - Department of Mathematics, Sardar Vallabhbhai National Institute of Technology, Surat, Gujarat 395007, India. - School of Applied Science and Humanities, Haldia Institute of Technology, Haldia, West Bengal 726157, India

2 Department of Applied Mathematics with Oceanology and Computer Programming, Vidyasagar University, Midnapore, Paschim-Medinipur, West Bengal 721102, India

3 Department of Mathematics, Sardar Vallabhbhai National Institute of Technology, Surat, Gujarat 395007, India

4 Department of Mathematics, Mahishadal Raj College, Mahishadal, Purba-Medinipur, West Bengal 721628, India

Abstract

In this study, a supplier-retailer-customer supply chain has been proposed for a deteriorating item with expiration time and dynamic deterioration rate. Here, the supplier adopt full credit policy for the retailer to enhance the retailer's order volume. This facility influences the retailer to provide some partial credit opportunity to the customers to boost the demand. For this credit policy, the retailer always faces a risk due to defaulters, which is termed as default credit risk. The default credit risk is considered in more realistic manner, which depends on the customers' partial credit period and credit amount. The market demand is influenced by customers' credit amount, customers' credit period and retail price of the item. Optimal decision is searched by maximizing the average profit of the system. For the search process, an artificial bee colony algorithm is implemented, tested and used. Illustration of the model is done with some hypothetical examples.

Keywords

References

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Scientia Iranica
Volume 32, Issue 4
Transactions on Industrial Engineering
January and February 2025 Article ID:4607

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History

  • Receive Date: 30 June 2020
  • Revise Date: 12 March 2022
  • Accept Date: 17 October 2022

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