Tamsui, Taipei: Tamkang University, Department of Management Sciences and Decision Making
In practice, most warehouses have limited capacity. Hence, it is important to determine the optimal inventory policy under storage capacity constraint. In this paper, a single-supplier single-retailer integrated inventory model with trade credit is developed. When the ordering quantity of retailer exceeds the capacity of its owned warehouse (OW), a rented warehouse (RW) is used for storing the excess units. In addition, the RW is assumed to have higher holding cost rate
than the Ow. Besides, the supplier offers a delay payment period to the retailer, and the length of credit period depends on retailer's order size. Moreover, the effect of a retail price dependent demand rate on the total integrated profit is taken into account. Several theorems and an algorithm are provided to find the optimal solution for the integrated inventory model. Finally, numerical examples are presented to illustrate the theoretical results. And, the sensitivity analysis of some key parameters is demonstrated.
Proceedings of the 2011 International Conference in Management Sciences and Decision Making=2011年管理科學與經營決策國際學術研討會論文集, pp.32-42