An inventory model under linked-to-order hybrid partial advance payment, partial credit policy, all-units discount and partial backlogging with capacity constraint. (September 2021)

• Record Type: Journal Article
• Authors: Khan, Md. Al-Amin; Shaikh, Ali Akbar; Cárdenas-Barrón, Leopoldo Eduardo
• Is Part Of: Omega. Volume 103(2021)
• Publication Date: 2021-09
• Subjects: Economic order quantity -- Capacity constraint -- Prepayment -- Delay payment -- Linked-to-order hybrid payment scheme -- Partial backordering; Management -- Periodicals; 658.4005
• DOI: 10.1016/j.omega.2021.102418
• Languages: English
• ISSNs: 0305-0483

Abstract

Highlights: An EOQ inventory model is studied under linked-to-order hybrid prepayment and delay payment scheme The EOQ model considers that the capacity of the retailer's own warehouse (OW) is limited Shortages are allowed which are accumulated partially during the stock out period The aim is to determine the optimal ordering and replenishment policies The closed-form optimal solutions are found examining all possible cases Abstract: A profit maximizing economic order quantity (EOQ) model is studied under linked-to-order hybrid prepayment and delay payment scheme considering the practical scenario that the capacity of the retailer's own warehouse (OW) is limited. Shortages are allowed which are accumulated partially during the stock out period. The main objective is to decide whether a rented warehouse (RW) is needed to obtain the optimal ordering and replenishment policies for a retailer. The closed-form optimal solutions are found examining all possible cases and an algorithm is constructed to achieve the global optimal solutions for the retailer. Finally, some management insights are drawn by observing the applicability of the developed algorithm and also by performing sensitivity analyses on different parameters.