Optimal Ordering and Trade Credit Policy for EOQ Model


Trade credit is the most prevailing economic phenomena used by the suppliers for encouraging the retailers to increase their ordering quantity. In this article, an attempt is made to derive a mathematical model to find optimal credit policy and hence ordering quantity to minimize the cost. Even though, credit period is offered by the supplier, both parties (supplier and retailer) sit together to agree upon the permissible credit for settlement of the accounts by the retailer. A numerical example is given to support the analytical arguments.Trade Credit, Optimal ordering quantity, Lot-size

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Research Papers in Economics

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Last time updated on 7/6/2012View original full text link

This paper was published in Research Papers in Economics.

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