Lot-sizing decisions under trade credit depending on the ordering quantity

This paper deals with the problem of determining the economic order quantity for exponentially deteriorating items under the conditions of permissible delay in payments. The delay in payments depends on the quantity ordered. When the order quantity is less than at which the delay in payments is permitted, the payment for the product must be made immediately. Otherwise, the fixed trade credit period is permitted. Based upon the above arguments, this paper incorporates both Hwang and Shinn (Comput. Oper. Res. 24 (1997) 539) and Khouja and Mehrez (J. Manuf. Systems 15 (1996) 334) under above conditions. In addition, the objective function is modeled as a total variable cost-minimization problem. An algorithm to determine the economic order quantity is developed. Examples are solved to illustrate the results given in this paper. Finally, the results in this paper generalize some already published results.