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International Journal of Mathematics and Mathematical Sciences
Volume 2014, Article ID 365929, 5 pages
http://dx.doi.org/10.1155/2014/365929
Research Article

Optimal Policies for Deteriorating Items with Maximum Lifetime and Two-Level Trade Credits

1Department of Mathematics, Gujarat University, Ahmedabad, Gujarat 380009, India
2Department of Mathematics, Government Polytechnic for Girls, Ahmedabad, Gujarat 380015, India
3Department of Mathematics, L.D. College of Engineering, Ahmedabad, Gujarat 380015, India

Received 4 February 2014; Accepted 24 March 2014; Published 10 April 2014

Academic Editor: Onesimo Hernandez-Lerma

Copyright © 2014 Nita H. Shah et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The retailer’s optimal policies are developed when the product has fixed lifetime and also the units in inventory are subject to deterioration at a constant rate. This study will be mainly applicable to pharmaceuticals, drugs, beverages, and dairy products, and so forth. To boost the demand, offering a credit period is considered as the promotional tool. The retailer passes credit period to the buyers which is received from the supplier. The objective is to maximize the total profit per unit time of the retailer with respect to optimal retail price of an item and purchase quantity during the optimal cycle time. The concavity of the total profit per unit time is exhibited using inventory parametric values. The sensitivity analysis is carried out to advise the decision maker to keep an eye on critical inventory parameters.