A Lot-Sizing Model for Non-Instantaneous Deteriorating Products Under Advance Payment and Non-Linear Partial Backlogging

Abstract

In reality, the buyers sometimes pay all or a percentage of the product price before receiving it, and the wholesaler sometimes allows them to prepay it at equal intervals. The present study develops a new mathematical model for products with non-instantaneous deteriorating rates by considering consecutive advance payments. In the proposed inventory model, the shortage is consisting of lost sales along with backorders simultaneously. Also, the model considers the backlogging as totally dependent on waiting time for the further cycle. In addition, the appropriate conditions to achieve the optimal solutions have been developed, and numerical instances have been provided to verify and evaluate the results and solution method. The useful methods to effectively reduce the annual total cost are provided according to the results of the sensitivity analysis.