Optimal payment policy for deteriorating item with preservation technology investment under trade credit and inflation

Abstract

Deterioration rate is assumed to be an uncontrolled variable whereas through investment in preservation techniques it can be controlled up to certain level. In this paper we have studied effect of preservation technique for deteriorating items. So we have considered controllable deterioration rate with time dependent demand and trade credit in an inflationary environment. Objective of this study is to optimize the Total relevant cost, Payment time, ordered quantity, Preservation cost. At the end of this paper numerical illustration of this model and sensitivity analysis is performed by changing values of some important parameters using Mathematical software Mathematica7.