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Abstract
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Article Information:
Economic Order Quantity Model with Two Levels of Delayed Payment and Bad Debt
Qin Juanjuan
Corresponding Author: Qin Juanjuan
Submitted: March 30, 2012
Accepted: April 23, 2012
Published: August 15, 2012 |
Abstract:
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The purpose of this study is to determine the optimal retailer’s replenishment policies considering
the customers’ bad debt and delayed payment in the three-stage supply chain with the dominant retailer. The
effect of bad debt is analyzed on the interest earned and interest charged to build the models of the retailer’s
decision in two cases. By analyzing the model, the retailer’s optimal replenishment time and the optimal order
quantity are obtained. Furthermore, analyze the effect of parameters on the retailer’s optimal order policies.
Finally, the numerical analysis is presented to demonstrate the conclusions. The results show that the delayed
payment offered by the manufacturer becomes large, the retailer's optimal order cycle and the optimal order
quantity increases or remains the same; When the delayed payment time offered by the retailer decreases, the
retailer's optimal order cycle and the optimal order quantity increases or remains the same. When the fixed
ordering cost is reduced, the retailer's optimal order cycle and the optimal order quantity decreases or remains
the same. When the charged interest is greater than the earned interest, with the bad debt rate increasing, the
retailer's optimal order cycle and optimal order quantity is converged to a certain value.
Key words: Bad debt, delayed payment, EOQ, the dominant retailer, , ,
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Cite this Reference:
Qin Juanjuan, . Economic Order Quantity Model with Two Levels of Delayed Payment and Bad Debt. Research Journal of Applied Sciences, Engineering and Technology, (16): 2831-2838.
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ISSN (Online): 2040-7467
ISSN (Print): 2040-7459 |
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