Comparative Analysis of Inventory Management System with Two-Phase Time-dependent Demand and Shortages under Tolerable Slack of Payment for Deteriorating Goods

Abstract

In actual commercial transactions, the supplier frequently gives the merchant a maximum permitted settlement delay in order to boost sales. In order to account for these variations and assume time-varying holding costs and shortages, this research analyses a time-dependent two-phase ramp curve demand under the allowable slack of payment model for goods with a limited life span. The demand rate for the nonlinear ramp curve is deterministic, changes over time until a pivotal moment, and remains constant. It is presumed that the breakthrough point happened within the cycle duration. Two scenarios are considered: One is that the slack of the payment period is shorter than the demand turning point, and on the other hand, the payment defer period is higher than the demand turning point. The outcomes of numerical results are used to compare the best optimality. The sensitivity analysis is then employed to exhibit the extent of the applicability of the inventory parameters.