An Inventory Model with Price and Credit Installments-Dependent Demand
Financial capability is one of the primary drivers for buyers to make purchases. Therefore, sellers must set an optimum selling price and consider trade credit facilities to attract more demand. This paper proposes an inventory decision model in which customer demand depends on the price and number of credit installments to serve low-abled buyers. This study has developed a demand function with a positive impact on installment policies and the effect of the selling price. Two models have been formulated to optimize the selling price and positive stock time, m total profit, with and without installment policies. Then, numerical examples and sensitivity analysis illustrate the proposed model for different cases. The study has found that the selling price and positive stock time can be optimized. Profits can be higher in the case of an installment facility than in the case without an installment facility. It shows positive responses from the buyer to the installment policy.
Other Information
Published in: Management Systems in Production Engineering
License: http://creativecommons.org/licenses/by/4.0
See article on publisher's website: https://dx.doi.org/10.2478/mspe-2023-0014
History
Language
- English
Publisher
De GruyterPublication Year
- 2023
License statement
This Item is licensed under the Creative Commons Attribution 4.0 International License.Institution affiliated with
- Hamad Bin Khalifa University
- College of Science and Engineering - HBKU