EPQ model for deteriorating products with demand dependent production rate under advance-cash-credit payment scheme

In today’s modern business transactions, the supplier of raw meterials usually asks the manufacturer to pay via the advance-cash-credit (ACC) payment policy. According to this ACC payment policy, the manufacturer pays a fraction of the procurement cost as advance payment when signing a contract to buy raw meterials, pays another fraction of the procurement cost as cash payment in cash when receiving the ordered quantity, and receives a short-term interest-free credit period to pay the remaining procurement cost as credit payment. In this article, we develop an EPQ model for deteriorating products under the ACC payment policy.The main goal of this article is to determine an optimal selling price while maximizing the total profit of the manufacturer. In addition, some numerical examples are provided to illustrate the developed EPQ model and show the concavity of the profit function with respect to selling price.