Net present value maximizing inventory analysis with two product types and credit facilities
The classic economic order quantity inventory model assumes that all items received from a seller are perfect in quality. Payment for the items is presumed made at the inventory cycle’s start, when the materials are received. This paper considers a system of inventory control where we receive two ty...
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| Format: | conferenceObject |
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2018
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| Online Access: | http://hdl.handle.net/10725/7409 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2431112 |
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| Summary: | The classic economic order quantity inventory model assumes that all items received from a seller are perfect in quality. Payment for the items is presumed made at the inventory cycle’s start, when the materials are received. This paper considers a system of inventory control where we receive two types of materials, perfect and less than perfect. In addition, a credit facility in paying for the raw materials exists. The percentage of perfect quality items is assumed to be distributed randomly. A case study illustrates the mathematical model showing the best order quantity. |
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