Manufacturer-Retailer Integrated System for Multi-Item Considering Two-Level Trade Credit, Volume Flexible, and Selling Price Dependent Demand

Nargis Jahan

Abstract: In this paper, an integrated manufacturer-retailer inventory model is developed considering trade credit policy. Integrated system designs inventory policy for multi-item. Demand rate is considered as the non-linear function of selling price. Concept of volume flexibility is adopted by the manufacturer to tune with the customer?s demand. Two-level trade credit policy is adopted in which the manufacturer offers trade credit period to retailer and the retailer provides trade credit period to his/her customers. This paper deals with the problem to determine the optimal values of production rate and production run time so that the total profit of the integrated system is maximum. Proposed model is illustrated with the help of numerical example and sensitivity analysis.

Keywords: Manufacturer-retailer inventory model, volume flexibility, two-level trade credit, ideal time, selling price-dependent demand