Authors : Chung-Li Chou , Yung-Fu Huang and Hung-Fu Huang
Abstract: In this study, we correct the model of Chang that discussed with the Economic Order Quantity (EOQ) under conditions of cash discount and payment delay. In addition, we try to use different method from Chang for obtaining optimal cycle time under cash discount and payment delay so that the annual total cost is minimized. This study provides an algebraic approach to determine the optimal cycle time. This approach provides one theorem to efficiently determine the optimal cycle time. Finally, numerical examples are solved to illustrate the results that may cause significant errors and penalties using wrong model when the cash discount rate is larger and the managerial insights from these numerical examples and sensitivity analysis are also obtained.
Chung-Li Chou , Yung-Fu Huang and Hung-Fu Huang , 2007. On Extended EOQ Model Under Cash Discount and Payment Delay Derived Without Derivatives. Journal of Engineering and Applied Sciences, 2: 143-148.