DETERIORATING INVENTORY MODEL IN DEMAND DECLINING MARKET UNDER INFLATION WHEN SUPPLIER CREDITS LINKED TO ORDER QUANTITY

In this article, an inventory model is developed when supplier offers the retailer a credit period to settle the account, if the retailer orders a large quantity. The proposed study is meant for demand declining market. Shortages are not allowed and the effect of inflation is incorporated. The units in inventory are subject to constant rate of deterioration. The total cost is minimized for deteriorating items in demand declining market under inflation when the supplier offers a credit period to the retailer if the order quantity is greater than or equal to a pre – specified quantity. An easy – to – use algorithm is exhibited to find the optimal order quantity and the replenishment time. The mathematical formulation is explored by a numerical example. The sensitivity analysis of parameters on the optimal solution is carried out.