Ordering policies for deteriorating imperfect quality items with trade-credit financing under learning effect
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ORIGINAL ARTICLE
Ordering policies for deteriorating imperfect quality items with trade-credit financing under learning effect Mahesh Kumar Jayaswal1 • Mandeep Mittal2
•
Isha Sangal1
Received: 14 January 2020 / Revised: 16 August 2020 / Accepted: 12 September 2020 The Society for Reliability Engineering, Quality and Operations Management (SREQOM), India and The Division of Operation and Maintenance, Lulea University of Technology, Sweden 2020
Abstract In obedience with the economic order quantity model, the ordered lot has 100% good quality items, but this is only suppositional. On examination, it is learnt that some of the produced lots have defective items because of process retrogression and other such factors. Thus, in this situation, the inspection of lots is essential for all organizations when the items are deteriorating in nature. Owing to this fact, an inventory model is proposed for deteriorating items with in-process inspection with learning effect under permissible delay in the payments. The aim of this paper is to study the impact of learning on the ordered quantity under the influence of trade-credit financing. Finally, the expected total profit function is maximized with respect to order quantity under credit financing. This paper, which is an extension of Patro et al. (Int J Manag Decis Mak 17(2): 171–198, 2018) commendable work, makes significant use of permissible delay in payment and proposed an inventory model for deteriorating imperfect quality items with learning effect. A numerical example given ahead shows the verification of results. Results suggest that impact of trade-credit policy is positive on the proposed inventory model. The effect of key parameters on the model is studied by sensitivity analysis to deduce managerial insights.
& Mandeep Mittal [email protected] 1
Department of Mathematics and Statistics, Banasthali Vidyapith, Banasthali, Rajasthan 304022, India
2
Department of Mathematics, Amity Institute of Applied, Amity University Noid, Sector-125, Noida, Uttar Pradesh 201313, India
Keywords Inspection Learning impact Deterioration Defective quality item Credit financing policy
1 Introduction, literature review and learning curve 1.1 Introduction The EOQ is of great importance in managing the stock and is essential for smooth running of any business organization. In the nineteenth century, mathematical formulation of the economic order quantity had been broadly used in stock organization. Except numerous EOQ mathematical models which have covered some truthful suppositions similar to all those formulated that the lots are not good in quality. Whitin (1957) took into contemplation the deterioration and decay of fashion commodities and related articles at the conclusion of a prescribed period of time. Ghare and Schrader (1963) discussed and modified a mathematical formulation for deteriorating things which followed an exponentially decaying rate. Several authors have implemented the phenomenon of delay in payment schemes (or the delayed payment mechanism)
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