DECISION SUPPORT MODEL WITH PRICE AND TIME INDUCED DEMAND UNDER MULTILEVEL CONDITIONAL DELIVERIES

Abstract

In this paper an inventory model for decaying goods with time and selling price induced quadratic demand is considered to
determine optimal cycle time, optimal purchase quantity and minimum total cost of the inventory system. The model is developed and solved analytically by considering four stage conditional deliveries associated with different credit periods and discounting. Numerical illustrations and sensitivity analysis are provided to deduce managerial insights. Findings suggest that the inventory manager can be more benefited by making the values of holding cost, selling price and cash discount relatively higher that will reduce the total cost of the inventory system.