A Study on an Optimal Four Echelon Inventory Model for Growing Items with Imperfect Quality and Trade Credit Financing

Abstract

Giving quality products to the customers is the desire to every manufactures. And this strategy plays a vital role to retain the customers. Another important strategy to retain the customers is to practicing the trade credit financing. In this customer can buy the products from the vendor and repay the amount later. So this proposed work develops an integrated inventory model for a four echelons in the form of farming, processing, screening and retail operations along with the trade credit financing. The farmer grows new born items and then delivers them to a processor once the items are mature enough. During the processing time the items are slaughtered, processed, packaged and screened for quality. The processor then delivers good quality items to the retailer and sells the processed poorer quality items to the secondary markets. The main objective is to retain the customers as well as maximize the overall supply chain profit. Mathematical Model and Numerical example illustrates the proposed model in a clear understanding.