A comprehensive extension of optimal ordering policy for stock-dependent demand under progressive payment scheme

[[abstract]]In a recent paper, Soni and Shah (2008) presented an inventory model with a stock-dependent demand under progressive payment scheme, assuming zero ending-inventory and adopting a cost-minimization objective. However, with a stock-dependent demand a non-zero ending stock may increase profits resulting from the increased demand. This work is motivated by Soni and Shah’s (2008) paper extending their model to allow for: (1) a non-zero ending-inventory, (2) a profit-maximization objective, (3) a limited inventory capacity and (4) deteriorating items with a constant deterioration rate. For the resulted model sufficient conditions for the existence and uniqueness of the optimal solution are provided. Finally, several economic interpretations of the theoretical results are also given.[[incitationindex]]SCI[[booktype]]紙

Optimal trade credit and lot size policies in economic production quantity models with learning curve production costs

[[abstract]]In reality, a seller (e.g., a supplier or a manufacturer) frequently offers his/her buyers trade credit (e.g., permissible delay in payment). Trade credit reduces the buyer's holding cost of inventory and hence attracts new buyers who consider it to be a type of price reduction. On the other hand, granting trade credit also increases the seller's opportunity cost (i.e., the loss of capital opportunity during the credit period) and default risk (i.e., the event in which the buyer will be unable to make the required payments on his/her debt obligation). In addition, it is a well-known fact of learning-by-doing that production cost of a new product declines by a factor of from 10 to 50 percent each time the accumulated production volume doubles. Therefore, we propose an economic production quantity model from the seller's prospective to determine his/her optimal trade credit period and production lot size simultaneously in which (i) trade credit increases not only sales but also opportunity cost and default risk, and (ii) production cost declines and obeys a learning curve phenomenon. Then the necessary and sufficient conditions to obtain the seller's optimal trade credit and order quantity are derived. Finally, we use some numerical examples to illustrate the theoretical results and to provide some managerial insights.[[notice]]補正完畢[[incitationindex]]SCI[[booktype]]電子

Inventory lot-size policies for deteriorating items with expiration dates and advance payments

[[abstract]]For deteriorating items with seasonal demand, a supplier usually requests that the buyer (retailer) prepays a fraction of the acquisition cost as a deposit. The expiration date of a deteriorating item is an important factor in a buyer's purchase decision. Despite its importance, relatively little attention has been paid to the effects of the expiration date; the versions of economic order quantity models that are available consider fixed deterioration rates. This paper considers a more realistic situation where the deterioration rate of a product gradually increases as the expiration date approaches. In this paper, the optimal cycle time and the cycle fraction of no shortages are the decision variables that minimize the total cost. The total annual relevant cost is shown to be strictly pseudo-convex for each of the decision variables, which simplifies the search for the global solution to a local minimum. This paper provides an improvement on earlier work, as it provides an optimal rather than a near-optimal solution. Several numerical examples are provided to illustrate the behaviour of the model and to highlight some managerial insights.[[notice]]補正完

Seller’s optimal credit period and replenishment time in a supply chain with up-stream and down-stream trade credits

[[abstract]]In practice, a supplier often offers its retailers a permissible delay period M to settle their unpaid accounts. Likewise, a retailer in turn offers another trade credit period N to its customers. The benefits of trade credit are not only to attract new buyers who consider it a type of price reduction, but also to provide a competitive strategy other than introduce permanent price reductions. On the other hand, the policy of granting credit terms adds an additional cost to the seller as well as an additional dimension of default risk. In this paper, we first incorporate the fact that trade credit has a positive impact on demand but negative impacts on costs and default risks to establish an economic order quantity model for the seller in a supply chain with up-stream and down-stream trade credits. Then we derive the necessary and sufficient conditions to obtain the optimal replenishment time and credit period for the seller. Finally, we use some numerical examples to illustrate the theoretical results.[[incitationindex]]SCI[[booktype]]電子

Supplier’s Optimal Replenishment Time and Trade Credit Period using the Concept of up-Stream and Down-Stream Trade Credits

[[abstract]]In practice, to attract new buyers and increase sales, a supplier frequently offers its retailers a credit period to settle the amount owed to him/her. There is no interest charge to a buyer if the purchasing amount is paid within the credit period, and vice versa. a retailer in turn offers another trade credit period N to its customers. The benefits of trade credit are not only to attract new buyers who consider it a type of price reduction, but also to provide a competitive strategy other than introduce permanent price reductions. On the other hand, the policy of granting credit terms adds an additional cost to the seller as well as an additional dimension of default risk. In this paper, we first incorporate the fact that trade credit has a positive impact on demand but negative impacts on costs and default risks to establish an EOQ model for the seller in a supply chain with up-stream and down-stream trade credits. Then we derive the necessary and sufficient conditions to obtain the optimal replenishment time and credit period for the seller. Finally, we use some numerical examples to illustrate the theoretical results.[[sponsorship]]淡江大學管理科學學系[[conferencetype]]國際[[conferencetkucampus]]淡水校園[[conferencedate]]20130518~20130518[[iscallforpapers]]Y[[conferencelocation]]Tamsui, New Taipei City, Taiwa

An optimal replenishment policy for deteriorating items with time-varying demand and partial backlogging

[[abstract]]Recently, Papachristos and Skouri developed an inventory model in which unsatisfied demand is partially backlogged at a negative exponential rate with the waiting time. In this article, we complement the shortcoming of their model by adding not only the cost of lost sales but also the non-constant purchase cost.[[notice]]補正完畢[[incitationindex]]SC

An EOQ Model for Deteriorating Items with Power-Form Stock-Dependent Demand

[[notice]]補正完畢[[incitationindex]]E

Economic production quantity models for deteriorating items with price- and stock-dependent demand

[[abstract]]Large piles of consumer goods displayed in a supermarket are often associated with on sale items to induce more sales and profits. In this paper, we first establish an economic production quantity (or EPQ) model for deteriorating items when the demand rate depends not only the on-display stock level but also the selling price per unit. In addition, we impose a ceiling on the number of on-display stocks because too much stock leaves a negative impression on the buyer and the amount of shelf/display space is limited. We then provide the necessary conditions to determine an optimal solution that maximizes profits for the EPQ model. Finally, sensitivity analysis is applied on the parameter effects of the optimal price and production run time.[[notice]]補正完

A simple method to compute economic order quantities

In this note, a simple method by using the arithmetic-geometric-mean-inequality theorem is proposed to computer the global minimum economic order quantities without taking complex differential calculus or using tedious algebraic manipulations. In contrast to (Minner, S., 2007. A note on how to compute economic order quantity without derivatives by cost comparisons. International Journal of Production Economics 105, 293-296; Wee, H.M., Wang, W.T., Chung, C.J., 2009. A modified method to computer economic order quantities without derivatives by cost-difference comparisons. European Journal of Operational Research) based on a local cost minimum initially to derive the solution and then proven it's the global minimum, the proposed method yields the global minimum cost immediately and explicitly without using the cost comparisons and letting the time horizon to infinity.Inventory Without derivatives Arithmetic mean Geometric mean