An economic order quantity model for deteriorating item in a purchasing system with multiple prepayments

In the classic economic order quantity model the purchasing cost of an order should be paid at the time of its receipt. Sometimes, retailers ask purchasers to pay all or a fraction of the purchasing cost in advance and sometimes allow them to divide the prepayment into several equal-sized parts. In this paper, economic order quantity model for a deteriorating product with and without shortage under consecutive prepayments are developed. Numerical examples illustrate the proposed models and solution method and sensitivity analysis provides some managerial insights for managers.