Scientia Iranica

Scientia Iranica

Optimal Ordering Policy Under Acceptance Sampling Plan and Trade Credit Financing

Author
Department of Mechanical Engineering,Los Angeles
Abstract
Acceptance of sampling plans and trade credit has become increasingly common in today's
business. These two issues should be considered simultaneously when determining an ordering decision.
This paper uses EOQ to model the decision under the acceptance sampling plan and trade credit; meaning,
how often it would be necessary to order to minimize the total related cost. We develop theorems based
on optimum lemmas to solve the problem. Computational analyses are given to illustrate the solution
procedures and we discuss the in
uence of credit period, acceptance sampling plan, holding cost and
ordering cost on the total cost, and the ordering decision. We conclude with a computational analysis
that leads to a variety of managerial insights.
Keywords

Volume 17, Issue 2 - Serial Number 2
Transactions on Industrial Engineering (E)
December 2010

  • Receive Date 03 January 2011