INTEGRATED OPTIMAL SOLUTION FOR VARIABLE DETERIORATING INVENTORY SYSTEM OF VENDOR – BUYER WHEN DEMAND IS QUADRATIC Page No: 713-717

Ajay S Gor, Nita H Shah and Chetan Jhaveri

Keywords: Integrated optimal strategy, deterioration, permissible delay period, quadratic demand.

Abstract: An integrated optimal policy for the vendor and the buyer is studied when units in inventory are subject to deterioration at different rates and demand is quadratic. It is shown numerically that the integrated approach reduces the total joint cost significantly when compared with the independent decision of both the players. To encourage the buyer to place order of larger size, a permissible trade credit is offered by the vendor to the buyer to settle the account. A negotiation factor is incorporated to share the benefits of cost savings.



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