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

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

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

Multi products single machine economic production quantity model with multiple batch size

In this paper, a multi products single machine economic order quantity model with discrete delivery is developed. A unique cycle length is considered for all produced items with an assumption that all products are manufactured on a single machine with a limited capacity. The proposed model considers different items such as production, setup, holding, and transportation costs. The resulted model is formulated as a mixed integer nonlinear programming model. Harmony search algorithm, extended cutting plane and particle swarm optimization methods are used to solve the proposed model. Two numerical examples are used to analyze and to evaluate the performance of the proposed model

On a retailer’s EOQ in a supply chain with two-level trade credit

Recently, Teng and Goyal [Journal of the Operational Research Society, Vol. 58, pp. 1252-1255, 2007.] extended and modified Huang’s model [Journal of the Operational Research Society, Vol. 54, pp. 1011-1015, 2003.] to develop their model and established the proper theoretical results to obtain the optimal solution. Their inventory model is correct and interesting. However, they give the optimal solutions showing that Theorems 1 and 2 in Teng and Goyal are not complete. The main purpose of this paper is to overcome Teng and Goyal’s shortcomings and to present complete proofs of their Theorems 1 and 2

The optimal ordering policy with trade credit under two different payment methods

[[abstract]]Suppliers’ offering delay payment terms to retailers can be regarded as a type of price reduction. In today’s ever competitive marketplace, offering delay payments has become a commonly adopted method to suppliers. Most of the inventory models with permissible delay in payments assumed that the entire lot size is delivered at the same time. However, in practice, goods ordered are usually arrived overtime in separate batches. In this study, we discuss an inventory problem with a finite replenishment rate under trade credit for two payment methods. We establish a theorem to find the optimal solution for each payment method. Numerical examples are also given to illustrate the solution procedure. Finally, to investigate the effect of changes of some main parameter values on the optimal solution, a sensitivity analysis is performed and some management interpretations are proposed.[[journaltype]]國外[[incitationindex]]SCI[[ispeerreviewed]]Y[[booktype]]紙本[[countrycodes]]DE

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

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