Journal of Applied Sciences1812-56541812-5662Asian Network for Scientific Information10.3923/jas.2008.2785.2787TuYu-ChengHsuKuang-HuaHuangYung-Fu122008815In this study, the restrictive assumptions of the trade
credit period independent of the order quantity and the retailer`s unit
selling price equaled to the purchasing price per unit are relaxed to
fit real business situations. In 1985, Goyal considered the retailer`s
inventory replenishment problem under trade credit period independent
of the order quantity and the retailer`s unit selling price and the purchasing
price per unit were equal. This article investigates the retailer`s inventory
problem under trade credit period dependent of the order quantity and
the retailer`s unit selling price not necessarily equals to the purchasing
price per unit within the Economic Order Quantity (EOQ) framework. In
addition, we use an easy and simple arithmetic-geometric mean inequality
approach to determine the retailer`s optimal ordering policy under minimizing
the annual total relevant cost. This approach could therefore be used
easily to introduce the basic inventory theories to younger students who
lack the knowledge of calculus. Finally, numerical examples are given
to illustrate the proposed model and its optimal solution.]]>Chung, K.J., 1998Chung, K.J. and Y.F. Huang, 2003Goyal, S.K., 1985Horn, R.A. and C.R. Johnson, 1985Huang, Y.F. and K.J. Chung, 2003Huang, Y.F., 2003Huang, Y.F., 2004Huang, Y.F., 2006Huang, Y.F.,2007Khouja, M. and A. Mehrez, 1996Teng, J.T., 2002