Optimal Policy for EOQ Model with Two Level of Trade Credits in One Replenishment Cycle

DOI: 10.4236/ajor.2012.21006   PDF   HTML     5,039 Downloads   9,413 Views   Citations


In general, a supplier/retailer frequently offer trade credit to stimulate their respective sales. The main purpose of this paper is to investigate the optimal supplier/retailer’s replenishment decisions under two levels of trade credit policy within the economic order quantity (EOQ) framework. This paper deals with the supplier/retailer’s inventory replenishment problem under two levels of trade credit in one replenishment cycle. A different approach of two levels of trade credit is used, which give more freedom to the supplier/retailer in business. In addition, the easy-to-use procedure is developed to efficiently find the optimal cycle time for the retailer under minimizing annual total relevant cost. Finally, a numerical example is given to illustrate these results.

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A. Sharma, R. Goel and N. Dua, "Optimal Policy for EOQ Model with Two Level of Trade Credits in One Replenishment Cycle," American Journal of Operations Research, Vol. 2 No. 1, 2012, pp. 51-58. doi: 10.4236/ajor.2012.21006.

Conflicts of Interest

The authors declare no conflicts of interest.


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