Research On The Order Strategy Of Perishable Items Under A Delay In Payments

The traditional way of financing which largely depends on banks as major finance source challenges middle and small-sized enterprises and restricts their development. Therefore, deferred payment service provided by the supplier to the retailer within the supply chain has become one of the effective ways to solve the retailer's financing by strengthening the links between enterprises within the supply chain. Perishable items have always been a tough question in inventory control due to their inherent deterioration feature, hence it is both theoretically and practically important to determine the ordering strategy under the back-ground of payment delay of perishable items.Based on the fact that retailers can gain certain income interests via product sales, this thesis establishes the EOQ model with increasing demand rate under a delay in payments provided by the supplier. It formulates a complete EOQ model of perishable items under a delay in payments, taking into consideration the dynamic features of the inventory system of the supplier, as well as the income interest rate and the time of delayed payment. Finally, it generates the optimal ordering strategy and supports our results by numerical examples. Besides, the effect of deferred payment terms and the income interest rate to the order policy of the retailer have been analyzed.