Abstract: The concept of progressive credit period given by
supplier for settling the account is as follows: If the retailer settles
outstanding amount by M, then the
supplier does not charge any interest. If the retailer pays after M
but before then the supplier charges the
retailer an unpaid balance at the rate If retailer settles the account
after N, then he will have to pay an
interest rate of Here an attempt is made to develop
mathematical model, when units in inventory are subject to constant rate of
deterioration and supplier provides two progressive credit periods. An
easy-to-use algorithm is given to find the optimal solution to the presented
mathematical formulation.
Keywords and phrases: deterioration, progressive trade credit.
