Optimal Payment Policy with Preservation Technology Investment and Shortages Under Trade Credit

Deterioration rate is assumed as uncontrolled variable but through preservation techniques the deteriorating nature of the items can be controlled up to certain level. Hence to study the effect of preservation techniques on inventory control system. In this paper we have developed a mathematical model with preservation technology investment for deteriorating inventory. The whole study is carried out under the effect of inflation and trade credit. The demand rate is directly dependent on time and partially backlogged shortages are permitted in this model. Our main objective of this study is to find optimal payment time and optimal vale of total cost. Numerical illustration and sensitivity analysis is given at the end of this paper. All the calculations are done with the help of mathematical software Mathematica7.