Study On Inventory-Order Strategies With Trade Credit And Price Discount In Non-instantaneous Deteriorating Items Supply Chain

Existing literatures, which considering the deterioration items inventory and order strategies with trade credit, mostly consider single items, no product storage, immediate deterioration, constant determination and so on. However, with the development of technology, some of deterioration items extend its shelf life through technological means. Therefore, these have a longer shelf-life products into the inventory is not metamorphosed immediate deterioration, but after a certain time to start to deteriorate. The inventory holding costs of non-instantaneous deterioration items will increase during storage, leading retailers tend to reduce the order quantity. In order to increase the retailer order quantity, suppliers typically use the price discounts or giving trade credit to stimulate the retailer to increase the order volume. Because of this, research trade credit and price discount of delayed deterioration items inventory strategy have become a research focus. And the inventory policies of multi-delayed deterioration items with trade credit and price discount also become one of the important issues.This paper studies the inventory and order strategies of single/multi non-instantaneous deterioration items under trade credit or price discounts. The main tasks including:(1) Through Stock-based differential equations, the paper constructs the single non-instantaneous deterioration items inventory-order model with considering the trade credit and price discounts, deterioration rate is dependent on inventory, demand depends on the price and time, and the present value. Lastly, the paper analyses the inventory and ordering policies under different scenarios and price discount, through numerical example.(2) First, according to inventory models, the paper sets up the inventory and ordering models, considering the present value of a variety delayed deterioration items with trade credit and price discount; Then, proved the existence of optimal credit period, price discounts, order cycle and order quantity by the form of propositions, and the optimal solution of different stock-order policies; Finally, numerical examples are drawn under the benefits of credit outweigh benefits of the price discount for retailer, and its corresponding inventory-order policies.(3) Compared order quantity, order cycle and total income under the credit period and price discounts of different strategies in different situations with retailer’s total revenue, getting the retailer’s optimal order quantity, the optimal order cycle and optimal pricing.We draw the conclusion that when retailers order single non-instantaneous deterioration items in trade credit and price discount in different range. The trade credit is better than the price discount, when retailers order multi no-instantaneous deterioration items. This paper presents an inventory and order policy model of multi-delayed deterioration items and enriches the multi-delay deterioration product inventory management research, and it has to provide retailers the reference of stock-order policy.