Revista de Matemática Aplicada e Computacional

Economic Ordering Policies of Linearly Time-Dependent Deteriorating Items with an Exponential Demand Rate under Credit Financing

Abstract

R. P. Tripathi, H. S. Shukla, Vivek Shukla and Sushil Kumar Yadav

This paper presents the economic ordering policies of linearly time-dependent deteriorating items with an exponential demand rate in the presence of trade credit using Discount Cash Flow (DCF) approach. Mathematical models are derived under two different situations: Case (1) Instantaneous cash flows, and Case (2) Fixed credit period. The expressions for on inventory systems present the value of all future cash flows are derived for these two cases. The main purpose of this paper is to obtain the optimal (minimum) present values of all future cash flows for both cases. The sensitivity analysis is given for the applicability of the purposed model. Mathematical software is used for finding numerical values of optimal cycle time with different discount rate and different credit period.