AN EOQ MODEL FOR NON-INSTANTANEOUS DETERIORATING ITEMS WITH TWO PHASE DEMAND RATES AND TWO-LEVEL PRICING STRATEGIES UNDER TRADE CREDIT POLICY.

Authors

  • B. Babangida Department of Mathematics and Statistics, Umaru Musa Yar'adua University, P.M.B. 2218, Katsina, Nigeria. Author
  • Y. M. Baraya Department of Mathematics, Ahmadu Bello University, Zaria, Nigeria. Author

Keywords:

trade credit policy, two-level pricing strategies, two phase demand rate rates, non-instantaneous deteriorating items, economic order quantity

Abstract

In some classical inventory models for non-instantaneous deteriorating items, it is tacitly assumed that the selling price before and after deterioration sets in is the same. However, in real practice, when deterioration sets in, the retailer may decide to reduce
the selling price in order to encourage more sales, reduces the cost of holding stock, attracts new customers and reduces lost due to deterioration. In this paper, an EOQ model for non-instantaneous deteriorating items with two phase demand rates and two-level pricing strategies under trade credit policy is considered. It is assumed that the unit selling price before deterioration sets in is greater than that after deterioration sets in. Also, the demand rate before deterioration sets in is assumed to be continuous time-dependent quadratic and that after deterioration sets in is considered as constant and shortages are not allowed. The main purpose of this research work is to determine the optimal cycle length and corresponding economic order quantity such that the total profit of the inventory system is optimise. The necessary and sufficient conditions for the existence and uniqueness of the optimal solutions have been established. Some numerical examples have been given to illustrate the theoretical result of the model. Sensitivity analysis of some model parameters on the decision variables has been carried out and suggestions toward
maximising the total profit were also given. 

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References

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Published

2021-12-01

How to Cite

AN EOQ MODEL FOR NON-INSTANTANEOUS DETERIORATING ITEMS WITH TWO PHASE DEMAND RATES AND TWO-LEVEL PRICING STRATEGIES UNDER TRADE CREDIT POLICY. (2021). The Transactions of the Nigerian Association of Mathematical Physics, 17, 117–130. https://nampjournals.org.ng/index.php/tnamp/article/view/204

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