1.Southwest Jiaotong University;2.China Academy of Railway Sciences Corporation Limited
Project supported by the National Natural Science Foundation , China (No.71371156，71872153)
This paper studies a joint ordering and trade credit decisions problem for deteriorate items based on the consumer’s shortage tolerance behavior. It assumes that customer generally have a tolerance period in the face of shortage (i.e., a zero-backlogged cost time period), and the market demand is dependent on trade credit period. Shortages are allowed and partially backlogged. The inventory models of joint ordering and credit period decisions for deteriorating items are proposed in two cases with the goal of maximize the retailer’s average profit. First, the optimal solutions existence and uniqueness are proved and some relevant theorem conclusions are derived. Then, a two-stage iterative algorithm is developed to search for the optimal solutions. Finally, the numerical example is presented to illustrate the practicability of the proposed model and algorithm, and the sensitivity analysis of the major parameters is performed. The results show that the consumer’s shortage tolerance behavior can effectively increase the retailer profits and reduce product deterioration loss, and also stimulate the retailer to provide a longer trade credit period, thereby achieving a win-win situation for the retailer and the consumer.