An Eoq Model For Imperfect Quality Deteriorating Items With Stock-Dependent Demand & Learning Effect Under Two-Level Trade Credit Financing Policy Subject To Partial Backlogging

Abstract

In this article an EOQ model for imperfect quality deteriorating items with stock-dependent demand is developed. It is assumed that the supplier has perfect and imperfect quality items. When the supplier provides lots for sale to his retailer, the retailer separates the whole lot by inspection process into perfect and imperfect quality items. The percentage of defective items present in the lot follows S-shape learning curve. Retailer will avail a price discount from the supplier due to rework process and customers will get a price discount for reworked items. The retailer who purchases the items enjoys a fixed credit period offered by the supplier and in turn, also offers a credit period to the customer in order to compete the market competition. Shortages are allowed and are partially backlogged. The backlogging rate varies inversely as the waiting time for the next replenishment. The main objective of the inventory model is to minimize the total cost per unit time and to determine the optimal cycle length. Numerical examples have given to elucidate our model. Finally sensitivity analysis has been carried for variation of the input parameters on the decision variables and total cost.