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 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.

scholarly journals An Inventory System for Deteriorating Products with Ramp-Type Demand Rate under Two-Level Trade Credit Financing

2011 ◽  
Vol 2011 ◽  
pp. 1-15 ◽  
Author(s):  
G. Darzanou ◽  
K. Skouri
Keyword(s):  
Existence And Uniqueness ◽  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Inventory System ◽  
Credit Policy ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Credit Financing ◽  
Ramp Type Demand

An inventory system for deteriorating products, with ramp-type demand rate, under two-level trade credit policy is considered. Shortages are allowed and partially backlogged. Sufficient conditions of the existence and uniqueness of the optimal replenishment policy are provided, and an algorithm, for its determination, is proposed. Numerical examples highlight the obtained results, and sensitivity analysis of the optimal solution with respect to major parameters of the system is carried out.

scholarly journals A Global Optimizing Policy for Decaying Items with Ramp-Type Demand Rate under Two-Level Trade Credit Financing Taking Account of Preservation Technology

2013 ◽  
Vol 2013 ◽  
pp. 1-12 ◽  
Author(s):  
S. R. Singh ◽  
Swati Sharma
Keyword(s):  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Credit Policy ◽  
Preservation Technology ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Credit Financing ◽  
Delay In Payments ◽  
Ramp Type Demand

An inventory system for deteriorating items, with ramp-type demand rate, under two-level trade credit policy taking account of preservation technology is considered. The objective of this study is to develop a deteriorating inventory policy when the supplier provides to the retailer a permissible delay in payments, and during this credit period, the retailer accumulates the revenue and earns interest on that revenue; also the retailer invests on the preservation technology to reduce the rate of product deterioration. Shortages are allowed and partially backlogged. Sufficient conditions of the existence and uniqueness of the optimal replenishment policy are provided, and an algorithm, for its determination, is proposed. Numerical examples draw attention to the obtained results, and the sensitivity analysis of the optimal solution with respect to leading parameters of the system is carried out.

scholarly journals Optimal ordering policy in a two-echelon supply chain model with variable backorder and demand uncertainty

2020 ◽  
Author(s):  
Sumon Sarkar ◽  
B. C. Giri
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Demand Uncertainty ◽  
Trade Credit ◽  
Chain Model ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Solution Algorithms ◽  
Supply Chain Model ◽  
Credit Financing

The paper investigates a two-echelon production-delivery supply chain model for products with stochastic demand and backorder-lost sales mixture under trade-credit financing. The manufacturer delivers the retailer's order quantity in a number of equal-sized shipments. The replenishment lead-time is such that it can be crashed to a minimum duration at an additional cost that can be treated as an investment. Shortages in the retailer's inventory are allowed to occur and are partially backlogged with a backlogging rate dependent on customer's waiting time. Moreover, the manufacturer offers the retailer a credit period which is less than the reorder interval. The model is formulated to find the optimal solutions for order quantity, safety factor, lead time, and the number of shipments from the manufacturer to the retailer in light of both distribution-free and known distribution functions. Two solution algorithms are provided to obtain the optimal decisions for the integrated system. The effects of controllable lead time, backorder rate and trade-credit financing on optimal decisions are illustrated through numerical examples.

scholarly journals Inventory Modeling for Deteriorating Imperfect Quality Items with Selling Price Dependent Demand and Shortage Backordering under Credit Financing

2017 ◽  
Vol 2 (2) ◽  
pp. 110-124 ◽  
Author(s):  
Aditi Khanna ◽  
Prerna Gautam ◽  
Chandra K. Chandra K.
Keyword(s):  
Trade Credit ◽  
Optimal Order ◽  
Manufacturing Processes ◽  
Selling Price ◽  
Imperfect Quality ◽  
Inspection Process ◽  
Total Profit ◽  
Credit Financing ◽  
Fierce Competition ◽  
Dependent Demand

The production processes throughout the world aim at improving quality by introducing latest technologies so as to perform well in fierce competition. Despite this due to various unavoidable factors, most of the manufacturing processes end up with certain imperfections. Hence, all the items produced are not of perfect quality. The condition tends to be more susceptible while dealing with items of deteriorating quality; therefore an inspection process is must for screening good quality items from the ordered lot. Demand is assumed to be price dependent and it is represented by a constant price elasticity function. Also to endure with the rapid growth and turbulent markets, the suppliers try to engage and attract retailers through various gimmicks and one such contrivance is offering trade credit, which is proved to be an influential strategy for attracting new customers. In view of this, the present paper develops an inventory model for items of imperfect quality with deterioration under trade-credit policies with price dependent demand. Shortages are allowed and fully backlogged. A mathematical model is developed to depict this scenario. The aim of the study is to optimize the optimal order level, backorder level and selling price so as to maximize the retailer’s total profit. Findings are validated quantitatively by using numerical analysis. Sensitivity analysis is also performed so as to cater some important decision-making insights.

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.

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