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Supplier Credit in the Economic Order Quantity Model

Supplier Credit in the Economic Order Quantity Model The standard economic order quantity model assumes that stocks arepaid for when delivered. Supplier credit is widely available and canhave considerable impact on holding costs and on the optimal orderquantities. A simple extension to the standard economic order quantitymodel yields significant savings for items which have order cycles thatare short relative to the period allowed for payment. The analysis alsoincreases the attractiveness of joint replenishment models andhighlights some difficulties of applying discrete demand models. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Operations & Production Management Emerald Publishing

Supplier Credit in the Economic Order Quantity Model

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0144-3577
DOI
10.1108/EUM0000000001286
Publisher site
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Abstract

The standard economic order quantity model assumes that stocks arepaid for when delivered. Supplier credit is widely available and canhave considerable impact on holding costs and on the optimal orderquantities. A simple extension to the standard economic order quantitymodel yields significant savings for items which have order cycles thatare short relative to the period allowed for payment. The analysis alsoincreases the attractiveness of joint replenishment models andhighlights some difficulties of applying discrete demand models.

Journal

International Journal of Operations & Production Management – Emerald Publishing

Published: Sep 1, 1991

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