Optimal Ordering Policy Under Acceptance Sampling Plan and Trade Credit Financing


Department of Mechanical Engineering,Los Angeles


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.