An analysis of replenishment model of deteriorating items with ramp-type demand and trade credit under the learning effect. (2018)

• Record Type: Journal Article
• Authors: Sharma, Archana; Sharma, Usha; Singh, Chaman
• Is Part Of: International journal of procurement management. Volume 11:Number 3(2018)
• Page Start: 313
• Page End: 342
• Publication Date: 2018
• Subjects: ramp-type demand -- partial backlogging -- learning effect -- trade credit -- inflation; Industrial procurement -- Management -- Periodicals; Industrial procurement -- Electronic information resources -- Periodicals; Business logistics -- Periodicals; 658.7205
• Languages: English
• ISSNs: 1753-8432

Abstract

Effective management and control strategies are prerequisites in order to optimise inventory related decisions. Robust replenishment model can reduce overall inventory cost and increase financial surplus for the organisation. Adoption of trade credit strategy for deteriorating items provides economic benefits to the retailer (buyer) in settling the account for the fixed period and boosts the sales of the organisation. Therefore, in this proposed model trade credit is introduced and demands pattern follows ramp-type which is quadratic function of time for decaying items. Shortages are allowed and partially backlogged where the backlogging rate is dependent of waiting time. The inflation factor is also considered to propose realistic environment. Additionally, this study also considered the cost components which are followed by learning curve to improve the total inventory cost with strategic scheduling. Finally, the model is analysed through numerical examples and the sensitivity analysis is performed to test the robustness of the model.