A Note on an Optimal EOQ Inventory Policy for a Deteriorating Item Varying With Generalised Time-Dependent Demand and Delay in Payment Conditions

The main purpose of this study is to investigate the effect of the generalized demand pattern and the delay in payment conditions within the EOQ (Economic Order Quantity) framework. The EOQ inventory model for a deteriorating item is formulated with incorporation of the following characteristics: 1) the proposed inventory system considers only single type of items; 2) deteriorating items follow the constant deterioration rate; 3) demand is deterministic, continuous, and cubic function of time; 4) delay in payment is accepted; 5) neither shortages nor any form of backlogging is allowed to occur. The EOQ inventory model is derived on the basis of two main circumstances for the account resolution, such as Case 1) the grace period is less than or equal to the inventory cycle, and Case 2) the grace period is greater than the inventory cycle. Results are analyzed and discussed with the help of four numerical examples. Finally, sensitivity analysis of several system parameters of the proposed model from one of the four examples is discussed.