SOME REPLENISHMENT RULES CONSIDERING PAYMENT PERIODS AND RISK OF OUTDATING

This paper is devoted to the study of the effects of payment terms on the replenishment strategy. We use a discounting approach with Poisson demand, a linear inventory carrying cost and a very short replenishme nt lead time. The case of repeated identical payments at the end of a specified period of t days, as well as the case of a one time longer p ayment period of u days, are taken into consideration. In both situati ons we are able to develop rules to determine the appropriate replenis hment quantities. We show how these rules change depending on whether the goods provided are subject to oudating or not. Numerical and graph ical illustrations are provided.