Retailer's optimal pricing and ordering policies for non-instantaneous deteriorating items with order quantity dependent trade credits and partial backlogging

In a competitive market, suppliers may offer different trade credit periods with different predetermined quantities to boost in their sales and to encourage retailers to order more quantities. In this article, we consider an inventory system with non-instantaneous deteriorating items, where the supplier provides the retailer with various trade credits linked to order quantity and the demand rate is considered to be deterministic depending on the selling price of the product. First, we develop a partial backlogged inventory model to identify the optimal pricing and ordering policies for retailer under various situations of trade credits. Numerical examples are presented to illustrate the proposed model. Finally, a sensitivity analysis is conducted to study the effects of main parameter values on the optimal solution and to draw managerial insights.