The optimal inventory policies under permissible delay in payments depending on the ordering quantity

This paper deals with the problem of determining the economic order quantity under conditions of permissible delay in payments. The delay in payments depends on the quantity ordered. When the order quantity is less than the quantity at which the delay in payments is permitted, the payment for the item must be made immediately. Otherwise, the fixed trade credit period is permitted. The minimization of the total variable cost per unit of time is taken as the objective function. An algorithm to determine the economic order quantity is developed. The results obtained in this paper generalize some already published results.