Effects of Joint Replenishment Policy on Company Cost under Permissible Delay in Payments

In today’s severely competitive business environment, reducing replenishment costs has become one of the most important objectives for companies. This study deals with the replenishment problem under the condition of permissible delay in payments. To better reflect real-world business situations, we extend the traditional EOQ model by considering the situations of permissible delay in payments and multi-item replenishment. This study presents both single-item and joint multi-item replenishment models, and develop theorems to solve the problems. The objective of the single-item replenishment policy is to determine the optimal replenishment cycle time for each item while minimizing the total cost. The objective of the joint multi-item replenishment policy is to determine a common optimal replenishment cycle time for all items. Using computational analysis, we illustrate the solution procedures and draw conclusions. The results of this study can serve as a reference for business managers or administrators.