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

Optimal Inventory Policies for Weibull Deterioration under Trade Credit in Declining Market

The aim of this study is to develop mathematical model for Weibull deterioration of items in inventory in declining market when the supplier offers his retailers a credit period to settle the accounts against the dues. The computational steps are explored for a retailer to determine the optimal purchase units which minimize the total inventory cost per time unit. The numerical examples are given to demonstrate the retailer’s optimal decision. A sensitivity analysis is carried out to study the variations in the optimal solution.Weibull deterioration, trade credit, declining market

Economic ordering and payment policies under progressive payment schemes and time-value of money

Trade credits have received considerable attention in recent years and have become one of the most important sources of short-term funding for many companies. The paper at hand studies the optimal ordering and payment policies of a buyer assuming that the supplier offers a progressive interest scheme. The contribution to the literature is twofold. First, the different financial conditions of the companies involved are taken into account by assuming that the credit interest rate of the buyer may, but not necessarily has to, exceed the interest rate charged by the supplier. In addition, the time-value of money is considered in this scenario which is relevant when trade credit terms are valid for a long period of time and payment flows need to be evaluated by their net present value to ensure long-term profitability. The models proposed enable decision makers to improve ordering and payment decisions and the results reveal that taking into account the temporal allocation of payments, the prevailing interest relation influences replenishment policies significantly

[[alternative]]The Study of Supply Chain Inventory Model with Price-Sensitive Demand and Trade Credit

計畫編號：NSC96-2416-H032-007研究期間：200708~200807研究經費：460,000[[abstract]]在現今競爭性的市場環境，企業已經由獨立決策改變為協同合作來制定策略。為降 低成本及改善服務水準，有效的供應鏈策略必須考慮在供應鏈中不同層級之間的互動關 係。在複雜的供應鏈中，存貨的控制是相當困難的工作，而且對顧客的服務水準及整體 供應鏈系統的成本有顯著的影響。因此，在供應鏈管理（Supply Chain Management, SCM）模式下建立適當的整合存貨模型，如何決定同一供應鏈上合作夥伴的最適庫存/ 訂購策略，使得存貨相關總成本為最小或總利潤為最大，是本研究的主要內容。 本研究為二年期的研究計畫，將在考量商品的需求量隨價格變動(即需求率為銷售 價格的遞減函數)，且允許信用交易(供應商允許零售商延遲付款)下，分別建立適當的 整合存貨模型，以決定供應鏈中供應商與零售商的最適存貨策略。第一年在需求率固 定、且供應商允許零售商延遲付款的情況下，嘗試建立分別以供應商為領導者（零售商 為跟隨者）、零售商為領導者（供應商為跟隨者）及雙方合作的供應鏈存貨模型，並求 出Stackelberg 均衡解。。第二年在市場需求率為零售商銷售價格的遞減函數，且供應商 允許零售商延遲付款的情況下，考量非合作與合作賽局策略，建立並求解供應商與零售 商的最佳存貨決策模式。我們將嘗試利用數學證明最佳解存在的充分且必要條件，接著 建立一個演算法求出使得單位時間總利潤有最大值的最適解。最後，以數值範例說明求 解過程，並對重要的參數值進行敏感性分析。[[sponsorship]]行政院國家科學委員

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

Advance sales system with price-dependent demand and an appreciation period under trade credit

[[abstract]]With globalization, companies are facing fierce competition. Offering an appreciation period has become a commonly adopted method by retailers to sustain competitive advantage. During the appreciation period, customers can request to return products for any reason. In addition, retailers provide advance sales to attract additional customers. The supplier usually provides the retailer with a trade credit, which they can use as a type of price reduction to attract additional customers. Price is viewed as an important vehicle to sell products and enhance revenues. Therefore, in this article, we establish an inventory model with price-dependent demand for a retailer who simultaneously receives trade credit from its supplier, and offers advance sales and an appreciation period to its customers. We first establish a proper model and then provide an easy-to-use method to obtain an ordering policy for the retailer to achieve its maximum total profit. Finally, numerical examples are given to illustrate the solution procedure

Trade Credit Policies for Supplier, Manufacturer, and Retailer: An Imperfect Production-Inventory System with Rework

In this study, we developed a trade credit policy for a three-layer supply chain consisting of a supplier, a manufacturer and a retailer. We propose an optimal production rate and selling price for the manufacturer and the retailer under an imperfect production system. The suggested coordination policy optimizes the profit of each supply chain member. Two models were formulated for two real-life strategies respectively. The first one is a collaborative (integrated) system and the second one is a Stackelberg leadership system. Both strategies were analyzed for various credit periods, respectively offered by the supplier to the manufacturer, by the manufacturer to the retailer, and by the retailer to the customers, by considering price-sensitive demand and a certain replenishment rate. Finally, we concluded which strategy will be better for inventory management under the given restrictions in the form of propositions. The concavity property for the net profit function was established with respect to the selling price and the production rate, which was also described graphically and analyzed by numerical examples