Capacity Constrained Warehouse Inventory Model for Deteriorating Items under Two - Level Partial Trade Credit

In trade credit financing, failure in payment leads to great loss or total collapse of business. Thus, good policies are invented to address situations when retailers or customers are suspected to be credit – risk in order to reduce the effect of the failure in payments on the business. In most cases, the focus has been on either credit - risk retailer or credit – risk customers but not both. This has not taken care of some market happenings when both retailers and customers are simultaneously perceived as credit – risk. This provides additional dimension to the supplier and retailer to curtail the menace of failure in payment at upstream and downstream levels respectively. In this study, partial trade credit is proposed concurrently at both upstream and downstream levels to curtail the menace of failure in payment. Numerical illustration of the model developed for the situation is given. The model determines the optimal cost in each of the possible cases and sensitivity analysis carried out to see the effect of parameter changes on the optimal solution.