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ISSN 2063-5346
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TWO-LEVEL TRADE CREDIT POLICY APPROACH FOR A PRODUCTION INVENTORY MODEL UNDER GREENING DEGREE DEPENDENT DEMAND AND RELIABILITY

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Ummeferva1, S.R. Singh2, Surendra Vikram Singh Padiyar3*
» doi: 10.48047/ecb/2023.12.si10.00492

Abstract

In this era, people are concerned about protecting the environment from human pollution, and businesses are turning to green technology to source environmentally friendly goods. As a result, it is challenging for the business manager to seize the market by offering the most incredible green quality at a reasonable price in a specific economy. In this model, demand depends on the selling price and the greening level of the product. Trade credit is one of the most powerful promotional strategies for pushing a product, as it indirectly reduces the product's selling price. Therefore in this research paper, an EPQ model is formulated under two trade credit policies with the effect of reliability. In this two-level trade credit policy manufacturer offers a permissible delay period to the retailer, and the retailer provides a partial trade credit to the customers. In the production system, reliability is also an essential factor. Production is always greater than demand; therefore, shortages are not allowed. Deterioration is considered at a constant rate. The main objective of this paper is to minimize the total cost. An algorithm has been given to solve the numerical example. To validate the proposed model, seven numerical examples have been solved for seven cases of trade credit. Mathematica 12 software is used to find the global minimum solution to the optimal cycle length (T), the time (????1) the production will end, and the convexity of total cost function concerning production time and cycle time has been shown for all the cases. The optimal solution is obtained in the third case where cycle length (T) exceeds the manufacturer's permissible delay time (N) and is less than the customer's trade credit period. Finally, a sensitivity analysis has been made for the numerical example 3. The paper concludes with the conclusion, and an outlook of possible future directions is depicted.

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