An EOQ Model Under the Condition of Permissible Delay in Payments with Allowed Stock-Out Cost and Lead Time

Abstract

From this present study, derive the two consecutive demands between the time intervals: economic order quantity and total annual variable cost. The solution for this inventory model is optimizing the total annual variable cost. Here, given an arithmetical example and sensitivity analysis for the provision of the inventory model, assume the planning horizon and replenishment rate are infinite. To the best of our knowledge, this is the first study to find out the total annual variable cost using various costs under the condition of a permissible delay in payments with an allowed stock-out cost and lead time.