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This paper deals with an inventory problem when delay in payments is permissible
and yield is random. In practice, the supplier offers some credit period
for settlement of accounts which is advantageous for the retailer in the
sense that he can sell the product during that time and can earn some interest
on the sales revenue during the permissible period of delay. In this problem
facility of a part payment is introduced. The effect of part payment on
the optimal solution is studied. The working of the model is illustrated
with the numerical example.
Key words: Deterministic model, partial payment privilege, random input.