Integrated supply chain model for a deteriorating item with procurement cost dependent credit period

This study develops an integrated production inventory model of supplier and retailer where a delay in payment is offered by supplier to retailer for a constant deteriorating item. Here shortages are not allowed. In this model retailer’s procurement cost linearly depends on the credit period and supplier’s process cost also is a linear function of the amount of quantity purchased by retailer. In this model, the objective is to decide the position of the credit period and number of replenishment of retailer in finite time horizon in such a way that the integrated system gets the optimum cost. The model is explained with the help of numerical examples and the sensitivity analysis of some parameters are also carried out.

► Variable credit period. ► Procurement cost dependent credit period. ► Supply chain. ► Deterioration.