Optimal order quantity of retailer with quadratic ramp-type demand under supplier trade credit financing

2014 ◽  
Vol 9 (2) ◽  
pp. 88-103 ◽  
Author(s):  
Subrata Saha
Keyword(s):  
Trade Credit ◽  
Optimal Order ◽  
Order Quantity ◽  
Optimal Order Quantity ◽  
Credit Financing ◽  
Ramp Type Demand

scholarly journals The Optimal Replenishment Policy under Trade Credit Financing with Ramp Type Demand and Demand Dependent Production Rate

2014 ◽  
Vol 2014 ◽  
pp. 1-18 ◽  
Author(s):  
Juanjuan Qin ◽  
Weihua Liu
Keyword(s):  
Production Rate ◽  
Trade Credit ◽  
Optimal Order ◽  
Maturity Stage ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Replenishment Policy ◽  
Replenishment Cycle ◽  
Credit Financing ◽  
Ramp Type Demand

This paper investigates the optimal replenishment policy for the retailer with the ramp type demand and demand dependent production rate involving the trade credit financing, which is not reported in the literatures. First, the two inventory models are developed under the above situation. Second, the algorithms are given to optimize the replenishment cycle time and the order quantity for the retailer. Finally, the numerical examples are carried out to illustrate the optimal solutions and the sensitivity analysis is performed. The results show that if the value of production rate is small, the retailer will lower the frequency of putting the orders to cut down the order cost; if the production rate is high, the demand dependent production rate has no effect on the optimal decisions. When the trade credit is less than the growth stage time, the retailer will shorten the replenishment cycle; when it is larger than the breakpoint of the demand, within the maturity stage of the products, the trade credit has no effect on the optimal order cycle and the optimal order quantity.

scholarly journals Trade Credit with Barter in a Capital-Constrained Supply Chain

2021 ◽  
Vol 13 (20) ◽  
pp. 11361
Author(s):  
Yangyang Huang ◽  
Zhenyang Pi ◽  
Weiguo Fang
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Wholesale Price ◽  
Uncertain Demand ◽  
Equilibrium Strategy ◽  
Optimal Order ◽  
Order Quantity ◽  
Supply Rate ◽  
Optimal Order Quantity ◽  
And Performance

Barter has emerged to alleviate capital pressure, maximize the circulation of goods, and facilitate the disposal of excess inventory. This study considers a two-level supply chain consisting of a manufacturer and a capital-constrained retailer with trade credit, in which the retailer exchanges unsold products for needed subsidiary products on a barter platform. The retailer’s optimal order quantity and the manufacturer’s wholesale price are derived, and the influences of barter and other factors on the equilibrium strategy and performance of the supply chain are examined; these results are verified and supplemented by numerical simulation. We find that the retailer can increase profit by bartering when facing highly uncertain demand, that the retailer’s optimal order quantity increases with the supply rate and demand for subsidiary products, and that both manufacturer and retailer benefit from the high supply rate of subsidiary products. However, barter induces the manufacturer to raise the wholesale price to prevent its profit from being harmed. In addition, the manufacturer suffers from the retailer’s initial capital.

An Optimal Inventory Policy for Items Having Constant Demand and Constant Deterioration Rate with Trade Credit

2012 ◽  
Vol 5 (2) ◽  
pp. 89-95 ◽  
Author(s):  
R. P. Tripathi ◽  
S. S. Misra
Keyword(s):  
Trade Credit ◽  
Optimal Order ◽  
Order Quantity ◽  
Inventory Models ◽  
Inventory Policy ◽  
Deterioration Rate ◽  
Optimal Order Quantity ◽  
Optimal Ordering ◽  
Constant Deterioration ◽  
Ordering Quantity

In most of the classical inventory models the demand is considered as constant. In this paper the model has been framed to study the items whose demand and deterioration both are constant. The authors developed a model to determine an optimal order quantity by using calculus technique of maxima and minima. Thus, it helps a retailer to decide its optimal ordering quantity under the constraints of constant deterioration rate and constant pattern of demand.

scholarly journals Optimal Financing Order Decisions of a Supply Chain under the Retailer's Delayed Payment

2014 ◽  
Vol 2014 ◽  
pp. 1-8 ◽  
Author(s):  
Honglin Yang ◽  
Ya Yu ◽  
Yong Zha ◽  
Jijun Yuan
Keyword(s):  
Numerical Simulation ◽  
Supply Chain ◽  
Trade Credit ◽  
Equilibrium Analysis ◽  
Optimal Order ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Game Equilibrium ◽  
Optimal Order Quantity ◽  
To Receive

In real supply chain, a capital-constrained retailer has two typical payment choices: the up-front payment to receive a high discount price or the delayed payment to reduce capital pressure. We compare with the efficiency of optimal decisions of different participants, that is, supplier, retailer, and bank, under both types of payments based on a game equilibrium analysis. It shows that under the equilibrium, the delayed payment leads to a greater optimal order quantity from the retailer compared to the up-front payment and, thus, improves the whole benefit of the supply chain. The numerical simulation for the random demand following a uniform distribution further verifies our findings. This study provides novel evidence that a dominant supplier who actively offers trade credit helps enhance the whole efficiency of a supply chain.

Retailer's Optimal Ordering Policy under Conditions of Allowable Shortage and Two-Level Trade Credit Derived without Derivatives

2013 ◽  
Vol 694-697 ◽  
pp. 3428-3433
Author(s):  
Fei Hu
Keyword(s):  
Differential Calculus ◽  
Trade Credit ◽  
Algebraic Method ◽  
Optimal Order ◽  
Order Quantity ◽  
Numerical Examples ◽  
Ordering Policy ◽  
Optimal Order Quantity ◽  
Optimal Ordering Policy ◽  
Optimal Ordering

An inventory model was developed to determine an ordering policy for the retailer under conditions of allowable shortage and two levels of delay permitted. We present a simple algebraic method to replace the use of differential calculus for determining the retailer's optimal ordering policy. A theorem is presented to obtain the optimal order quantity, and numerical examples are given to illustrate the results obtained in this paper.

RETAILER'S INVENTORY POLICY AND SUPPLIER'S DELIVERY POLICY UNDER TWO-LEVEL TRADE CREDIT STRATEGY

2007 ◽  
Vol 24 (05) ◽  
pp. 613-630 ◽  
Author(s):  
CHIA-HSIEN SU ◽  
LIANG-YUH OUYANG ◽  
CHIA-HUEI HO ◽  
CHUN-TAO CHANG
Keyword(s):  
System Performance ◽  
Trade Credit ◽  
Optimal Order ◽  
Profit Function ◽  
Entire System ◽  
Order Quantity ◽  
Supply Chain System ◽  
Credit Period ◽  
Production Run ◽  
Optimal Order Quantity

This paper presents a stylized model to determine the optimal strategy for the integrated supplier-retailer inventory model under the condition that both the supplier and retailer have adopted a trade credit strategy. By analyzing the total channel profit function, we develop an algorithm to simultaneously determine the retailer's optimal order quantity and the number of shipment per production run from the supplier to the retailer. Our results demonstrate that the trade credit strategy is effective to supply chain system performance when customers are sensitive to the credit period length offered by the retailer. Moreover, when customers are sensitive to the credit period, if the retailer conveys partial advantage gained from the trade credit offered by the supplier to customers by suitably adjusting the customer's credit period then the entire system and every channel partner can benefit.

scholarly journals Coping with Loss Aversion in the Newsvendor Model

2015 ◽  
Vol 2015 ◽  
pp. 1-11 ◽  
Author(s):  
Jianwu Sun ◽  
Xinsheng Xu
Keyword(s):  
Expected Utility ◽  
Loss Aversion ◽  
Confidence Level ◽  
Profit Maximization ◽  
Optimal Order ◽  
Market Demand ◽  
Newsvendor Model ◽  
Order Quantity ◽  
Decision Bias ◽  
Optimal Order Quantity

We introduce loss aversion into the decision framework of the newsvendor model. By introducing the loss aversion coefficientλ, we propose a novel utility function for the loss-averse newsvendor. First, we obtain the optimal order quantity to maximize the expected utility for the loss-averse newsvendor who is risk-neutral. It is found that this optimal order quantity is smaller than the expected profit maximization order quantity in the classical newsvendor model, which may help to explain the decision bias in the classical newsvendor model. Then, to reduce the risk which originates from the fluctuation in the market demand, we achieve the optimal order quantity to maximize CVaR about utility for the loss-averse newsvendor who is risk-averse. We find that this optimal order quantity is smaller than the optimal order quantity to maximize the expected utility above and is decreasing in the confidence levelα. Further, it is proved that the expected utility under this optimal order quantity is decreasing in the confidence levelα, which verifies that low risk implies low return. Finally, a numerical example is given to illustrate the obtained results and some management insights are suggested for the loss-averse newsvendor model.

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