In this paper, we provide the optimal ordering policy with deteriorating items under permissible delay in payments, and consider two possible ways for the retailer to pay oﬀ the loan. In Payment Method 1, we assume that the retailer pays oﬀ the amount owed to the supplier whenever he/she has money obtained from sales. In Payment Method 2, the retailer keeps his/her proﬁts for developing new products or other investment use. We then provide easy-to-use algorithms to ﬁnd the optimal order receipt period and the optimal cycle time. Some numerical examples are presented to illustrate the proposed model. In addition, we make the sensitivity of parameters on the optimal solution and propose economic interpretation.
International Journal of Information and Management Sciences=資訊與管理科學 19(3) , pp.437-453