Unreliable EPQ model with variable demand under two-tier credit financing

This article deals with an unreliable production-inventory model with varying demand under two-level trade credit policies. We consider that the supplier offers a fixed period to the manufacturer to repay the due amount whereas the manufacturer also provides a credit period to the customers for a payout of the buying price. In this model, the demand for the produced items depends on the selling price, frequency of advertisement, and the manufacturer's offered credit period. Here, the production system is unreliable, and after a certain period, the system goes into the "out-of-control" state and starts simultaneously to produce complete and defective items, where the random time variable follows two parameters "Weibull" distribution. Our prime purpose is to determine the optimal average integrated profit for the decision variables selling price, frequency of advertisement, offered credit period, and size of ordering raw material. Numerical examples are given to illustrate the model.