An EOQ model under retailer partial trade credit policy in supply chain

Huang, Yung‐Fu; Hsu, Kuang-Hua

doi:10.1016/j.ijpe.2007.05.014

Cited by 158 publications

(56 citation statements)

References 25 publications

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“…Under progressive credit period scenario, the retailer was charged higher interest rate on the unpaid dues. Huang and Hsu (2008) assumed that the retailer passes credit period to the customers by relaxing relation between selling price and purchase cost, the rate of interest rates and the lengths of the allowable credit periods. Liao (2008) computed interest earned on selling price and interest charged on purchase cost (less than the selling price) to study the effect of credit period when replenishment rate is finite and units in inventory deteriorate at a constant rate.…”

Section: Introductionmentioning

confidence: 99%

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Shah¹

2017

10.5267/j.uscm

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The player uses credit financing to perform profitable business. We analyze an economic order quantity model in which items have a fixed lifetime and deteriorate over time. The supplier offers the retailer a full credit period whenever the retailer orders more than or equal to a prespecified quantity. If the retailer orders less than pre-specified order quantity, then the retailer will do partial payment to the supplier and avail of delay in payments for the remaining outstanding amount. The demand is price-sensitive. The retailer's profit is maximized by setting appropriate retail price and replenishment time. The algorithm is developed to choose the best policy for the decision maker from the number of alternatives. Numerical data is used to validate the theoretical developments. Managerial insights are discussed. It is observed that for a given units to qualify for avail of partial credit period, increase in ordering cost decreases profit of the retailer. The increase in rate of the purchase cost to avail of delay payment suggests that to have a more profit, retailer should deplete stock before the allowable credit period.Growing Science Ltd. All rights reserved. 7

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Section: Introductionmentioning

confidence: 99%

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Shah¹

2017

10.5267/j.uscm

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“…Huang [11] derived a theorem on selecting the optimal replenishment cycle under deferred payment and thus simplified the solution to Goyal's model. Huang and Hsu [12] modified Goyal's model to obtain three theorems on determining the optimal cycle length and optimal order quantity. To minimize the inventory system cost, Chung [13] investigated the retailer's inventory policy under two levels of trade credit.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimal Decision of Deferred Payment Supply Chain considering Bilateral Risk-Aversion Degree

Liu

Futou

2018

Mathematical Problems in Engineering

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This paper aims to fill up the gap that the previous research has never explored, the deferred payment supply chain with a risk-averse supplier. To this end, the conditional value-at-risk (CVaR) was adopted as a criterion to measure the influence of retailer's deferred payment on supply chain performance. According to this criterion, the retailer's optimal order quantity and the supplier's optimal wholesale price per unit product were investigated under decentralized decision-making. Then, the existence of a unique optimal strategy was discussed for risk-averse supplier and retailer, and the values of risk-averse, initial capital, and wholesale price were calculated in detail. Finally, the theoretical results were testified through a numerical example. It is concluded that retailer's optimal order quantity is negatively correlated with the wholesale price, initial capital, and degree of risk aversion, so that the retailer can benefit through proper risk aversion; the supplier's expected profit decreases with the increase in the degree of risk aversion, yet the optimal wholesale price is determined by the degree of risk aversion of supplier and retailer. The research findings shed valuable new light on how to manage a supply chain involving risk-averse supplier and retailer.

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“…Ho et al (2008) developed an integrated supplier-buyer inventory model with the assumption that demand is sensitive to retail price and the supplier adopts a two-part trade credit policy. Huang and Hsu (2008) have developed an inventory model under two-level trade credit policy by incorporating partial trade credit option at the customers of the retailer. Liao (2008) Skouri et al (2011) studied supply chain models for deteriorating items with ramp-type demand rate under permissible delay in payments.…”

Section: Literature Reviewmentioning

confidence: 99%

Retailer's inventory system in a two-level trade credit financing with selling price discount and partial order cancellations

Thangam

2014

J Ind Eng Int

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In today's fast marketing over the Internet or online, many retailers want to trade at the same time and change their marketing strategy to attract more customers. Some of the customers may decide to cancel their orders partially with a retailer due to various reasons such as increase in customer's waiting time, loss of customer's goodwill on retailer's business, and attractive promotional schemes offered by other retailers. Even though there is a lag in trading and order cancellation, this paper attempts to develop the retailer's inventory model with the effect of order cancellations during advance sales period. The retailer announces a price discount program during advance sales period to promote his sales and also offers trade credit financing during the sales periods. The retailer availing trade credit period from his supplier offers a permissible delay period to his customers. The customer who gets an item is allowed to pay on or before the permissible delay period which is accounted from the buying time rather than from the start period of inventory sales. This accounts for significant changes in the calculations of interest payable and interest earned by the retailer. The retailer's total cost is minimized so as to find out the optimal replenishment cycle time and price discount policies through a solution procedure. The results derived in mathematical theorems are implemented in numerical examples, and sensitivity analyses on several inventory parameters are obtained.

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An EOQ model under retailer partial trade credit policy in supply chain

Cited by 158 publications

References 25 publications

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Retailer’s optimal policies for deteriorating items with a fixed lifetime under order-linked conditional trade credit

Optimal Decision of Deferred Payment Supply Chain considering Bilateral Risk-Aversion Degree

Retailer's inventory system in a two-level trade credit financing with selling price discount and partial order cancellations

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