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An inventory model under two levels of trade credit and limited storage space derived without derivatives. (English) Zbl 1182.90007
Summary: This paper tries to incorporate both Huang’s model [Y. F. Huang, J. Oper. Res. Soc. 54, No. 9, 1011–1015 (2003; Zbl 1097.90501)] and Teng’s model [J. T. Teng, J. Oper. Res. Soc. 53, No. 8, 915–918 (2002; Zbl 1098.90006)] by considering the retailer’s storage space limited to reflect the real-life situations. That is, we want to investigate the retailer’s inventory policy under two levels of trade credit and limited storage space. Furthermore, we adopt Teng’s viewpoint [loc. cit.] that the retailer’s unit selling price and the purchasing price per unit are not necessarily equal. Then, an algebraic approach is provided and three easy-to-use theorems are developed to efficiently determine the optimal cycle time. Some previously published results of other researchers can be deduced as special cases. Finally, a numerical example is given to illustrate these theorems and managerial insights are drawn.

MSC:
90B05 Inventory, storage, reservoirs
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