Optimal Ordering and Trade Credit Policy for EOQ Model

Trade credit is the most prevailing economic phenomena used by the suppliers for encouraging the retailers to increase their ordering quantity. In this article, an attempt is made to derive a mathematical model to find optimal credit policy and hence ordering quantity to minimize the cost. Even though, credit period is offered by the supplier, both parties (supplier and retailer) sit together to agree upon the permissible credit for settlement of the accounts by the retailer. A numerical example is given to support the analytical arguments.Trade Credit, Optimal ordering quantity, Lot-size

An EOQ model for three parameter Weibull deterioration with permissible delay in payments and associated salvage value

This paper deals with the development of an inventory model for Weibull deteriorating items with constant demand when delay in payments is allowed to the retailer to settle the account against the purchases made. Shortages are not allowed and the salvage value is associated with the deteriorated units. In this paper, we consider two cases; those are for the case payment within the permissible time and for payment after the expiry of permissible time with interest. Numerical examples are provided to illustrate our results. Sensitivity analysis are carried out to analyze the effect of changes in the optimal solution with respect to change in one parameter at a time

Supply chain finance for ameliorating and deteriorating products: a systematic literature review

Ameliorating and deteriorating products, or, more generally, items that change value over time, present a high sensitiveness to the surrounding environment (e.g., temperature, humidity, and light intensity). For this reason, they should be properly stored along the supply chain to guarantee the desired quality to the consumers. Specifically, ameliorating items face an increase in value if there are stored for longer periods, which can lead to higher selling price. At the same time, the costumers’ demand is sensitive to the price (i.e., the higher the selling price the lower the final demand), sensitiveness that is related to the quality of the products (i.e., lower sensitiveness for high-quality products). On the contrary, deteriorating items lose quality and value over time which result in revenue losses due to lost sales or reduced selling price. Since these products need to be properly stored (i.e., usually in temperature- and humidity-controlled warehouses) the holding costs, which comprise also the energy costs, may be particularly relevant impacting on the economic, environmental, and social sustainability of the supply chain. Furthermore, due to the recent economic crisis, companies (especially, small and medium enterprises) face payment difficulties of customers and high volatility of resources prices. This increases the risk of insolvency and on the other hand the financing needs. In this context, supply chain finance emerged as a mean for efficiency by coordinating the financial flow and providing a set of financial schemes aiming at optimizing accounts payable and receivable along the supply chain. The aim of the present study is thus to investigate through a systematic literature review the two main themes presented (i.e., inventory management models for products that change value over time, and financial techniques and strategies to support companies in inventory management) to understand if any financial technique has been studied for supporting the management of this class of products and to verify the existing literature gap

[[alternative]]An Order Policy for Deteriorating Items with Partial Backlogging under Permissible Delay in Payments

計畫編號：NSC92-2416-H032-003研究期間：200308~200407研究經費：513,000[[sponsorship]]行政院國家科學委員

[[alternative]]An Optimal Ordering Policy for Non-instantaneous Deteriorating Items under Permissible Delay in Payments

計畫編號：NSC94-2213-E032-011研究期間：200508~200607研究經費：668,000[[abstract]]本研究將針對非即時退化的物品，在供應商提供允許延遲付款優惠下，建立一個適 當的存貨模式，並找出使存貨相關總成本為最小的最適補貨策略。我們將發展一些理 論結果，且提出一個簡單容易使用的方法，以方便得到在不同情況下的最適補貨週期。 我們也將舉一些數值範例說明求解過程，並做敏感度分析。[[sponsorship]]行政院國家科學委員

Coordinating Supply Chains with a Credit Mechanism

This paper studies the supply chain coordination with a trade credit under symmetric and asymmetric information, where the retailer has an individual profit target from the business and the vendor is the decision-maker of the supply chain. We propose a coordination mechanism through credit contracts and show that a win-win outcome is achieved by redistributing the cost savings from coordination mechanism under certain constraints. Numerical examples are given to illustrate our results

Inventory Policies for Deteriorating Items with Maximum Lifetime under Downstream Partial Trade Credits to Credit-Risk Customers by Discounted Cash Flow Analysis

Getting loans from banks are almost impossible after 2008 global financial crisis. As a result, about 80% of companies in the United Kingdom and the United States offer their products on various short terms, free-interest loans to customers. To compute the interest earned and charged during the credit period but not to the revenue and other costs which are considerably larger than the interest earned and charged, numerous researchers and academicians apply merely the discounted cash flow (DCF) analysis. In addition, some products deteriorate continuously and cannot sell after expiration date. However, a little number of researchers have considered the product lifetime expectance into their models. In this chapter, a supplier-retailer-customer chain model is developed. The supplier provides an upstream full trade credit to the retailer, and the credit-risk customer gets a downstream partial trade credit from the retailer. The non-decreasing deterioration rate is 100% near particularly close to its expiration date. To compute all relevant costs, DCF analysis is applied. The retailer’s optimal replenishment cycle time is not only exists but also unique that demonstrated in this proposal and that has been shown by the numerical examples

Economic order quantity under retailer partial trade credit in two-echelon supply chain

In this paper, we want to investigate the retailer’s inventory policy when the retailer maintains a powerful position in two-echelon supply chain. That is, we assumed that the retailer can obtain the full trade credit offered by the supplier yet the retailer just offers the partial trade credit to their customers under two-level trade credit situation. Then, we investigate the retailer’s inventory system as a cost minimization problem to determine the retailer’s optimal inventory policy in two-echelon supply chain. Finally, numerical examples are given to illustrate the results and to obtain managerial insights