An EOQ for Deteriorating Items Under Supplier Credits When Demand is Stock Dependent

Nita H. Shah, Poonam Mishra

In many circumstances retailer is not able to settle the account as soon as items are received. In that scenario supplier can offer two promotional schemes namely cash discount and /or a permissible delay to the customer. In this study, an EOQ model is developed when units in inventory deteriorate at a constant rate and demand is stock dependent. The salvage value is associated to deteriorated units. An algorithm is given to find the optimal solution. The sensitivity analysis is carried out to analyze the effect of critical parameters on optimal solution.