Progressive trade credit policy in a supply chain with and without stock-out for supplier’s lead time under inflationary and fuzzy environment

Abstract

In this paper, we have developed a progressive trade credit model with and without stock-out for retailer under supplier's promised lead time incorporating the effect of inflation and time value of money. Supplier is not always in a position to fulfil retailer's request at any time, and thus forced to adopt new policies to deal with the situation. To deal with the situation, the supplier does not hold the inventory indeed, but produces the items whenever they are demanded and promises a certain lead time. Therefore, the retailer has the choices to have the shortage or not during the promised lead time period. This paper investigates different situations where the supplier promises the lead time and permissible delay in payments under the circumstances of retailer's choice to have the shortages or not. Finally, numerical examples along with sensitivity analysis are presented to illustrate the proposed model.