Optimal replenishment and credit policy in supply chain inventory model under two levels of trade credit with time- and credit-sensitive demand involving default risk

Mahata, Puspita; Mahata, Gour Chandra; De, Sujit Kumar

doi:10.1007/s40092-017-0208-8

Cited by 17 publications

(9 citation statements)

References 45 publications

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“…It is observed as in Jaggi et al [16] and Mahata et al [26] that trade credit offered by the Retailer to customers has a positive impact on demand. Because credit trade allows customers to enjoy the benefits of delayed payments, lengthening the period will stimulate sales.…”

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confidence: 84%

Two-echelon trade credit with default risk in an EOQ model for deteriorating items under dynamic demand

Mahata¹,

Mahata²

2021

JIMO

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In today's competitive markets, offering delay payments has become a commonly adopted method. In this paper, we examine an optimal dynamic decision-making problem for a retailer selling a single deteriorating product, the demand rate of which varies simultaneously with on-hand inventory level and the length of credit period that is offered to the customers. In addition, the risk of default increases with the credit period length. In this study, not only the supplier would offer fixed credit period to the retailer, but retailer also adopt the trade credit policy to his customer in order to promote the market competition. The retailer can accumulate revenue and interest after the customer pays for the amount of purchasing cost to the retailer until the end of the trade credit period offered by the supplier. A generalized model is presented to determine the optimal trade credit and replenishment strategies that maximize the retailer's total profit after the default risk occurs over a planning period. For the objective function sufficient conditions for the existence and uniqueness of the optimal solution are provided. Some properties of the optimal solutions are shown to find the optimal ordering policies of the considered problem. At the end of this paper, some numerical examples and the results of a sensitivity and elasticity analysis are used to illustrate the features of the proposed model; we then offer our concluding remarks.

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confidence: 84%

Two-echelon trade credit with default risk in an EOQ model for deteriorating items under dynamic demand

Mahata¹,

Mahata²

2021

JIMO

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“…We obtain the game equilibrium using backward induction approach. Thus, given the manufacturer's unveiled decisions, we first solve the retailer's problem (7) Maximizing (7) with respect to we have implying that (8) Also maximizing (7) with respect to we have implying that (9) which also implies that (10) From ( 8) and (10) we have Implying that (11) From (11) we have that This means that as the manufacturer increases the repayment period, the retailer also follows suit by extending the end-user repayment time. In essence the manufacturer's gesture extends to the end-user.…”

Section: Optimal Strategiesmentioning

confidence: 99%

“…Trade credit is an important financial strategy which has influenced a lot of research interests using mathematical models. For instance, considering some recent trade credit papers we observe that Panda et al [4] and Mahata and Mahata [5] considered product deterioration; Wang et al [6] studied replenishment in relation to product deterioration; Mashud et al [7] looked at preservation technology; Mahata et al [8] developed a model on default risk; Das et al [9] modelled product reliability; Ding et al [10] proposed a mathematical model aimed at optimizing trade credit agreements and safety stock; Tiwari et al [11] developed a trade credit model using warehouses.…”

Section: Introductionmentioning

confidence: 99%

A Mathematical Model of Optimal Manufacturer-Retailer Trade Credit Policy with End-User Credit Support

Ezimadu

2023

ARJOM

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The formulation and incorporation of credit function into trade credit models is a much recent development. In addition extension of this innovation to the end-user has not been achieved. This work models trade credit interaction extension from a manufacturer to a consumer through the retailer. It considers a Stackelberg game-theoretic model setting in which the manufacturer provides channel trade credit through the retailer to the end-user, while the retailer engages in promotion of the product. The paper uses backward induction to obtain the Stackelberg equilibrium for the promotion effort, the retailer’s credit period and the manufacturer’s credit period. It also obtains the long-run Stackelberg equilibria for the decision variables. The paper shows that the retailer is more liberal with allowable credit period than the manufacturer. In general, the players are credit period-liberal with retail margin, and ungenerous with credit period with manufacturer’s margin. It further shows that the manufacturer’s credit period increases more rapidly than the retailer’s credit period with retailer’s margin. On the other hand the manufacturer’s credit period decreases more rapidly than the retailer’s credit period with the manufacturer’s margin.

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“…Traditional inventory models [1][2][3][4] and production planning models [5][6][7] involve deterministic constrained functions and/or objective functions in deterministic environments. Nevertheless, uncertainty is nearly universal in real world.…”

Section: Introductionmentioning

confidence: 99%

Neutrosophic Number Optimization Models and Their Application in the Practical Production Process

Wang

2021

Journal of Mathematics

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In order to simplify the complex calculation and solve the difficult solution problems of neutrosophic number optimization models (NNOMs) in the practical production process, this paper presents two methods to solve NNOMs, where Matlab built-in function “fmincon()” and neutrosophic number operations (NNOs) are used in indeterminate environments. Next, the two methods are applied to linear and nonlinear programming problems with neutrosophic number information to obtain the optimal solution of the maximum/minimum objective function under the constrained conditions of practical productions by neutrosophic number optimization programming (NNOP) examples. Finally, under indeterminate environments, the fit optimal solutions of the examples can also be achieved by using some specified indeterminate scales to fulfill some specified actual requirements. The NNOP methods can obtain the feasible and flexible optimal solutions and indicate the advantage of simple calculations in practical applications.

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Optimal replenishment and credit policy in supply chain inventory model under two levels of trade credit with time- and credit-sensitive demand involving default risk

Cited by 17 publications

References 45 publications

Two-echelon trade credit with default risk in an EOQ model for deteriorating items under dynamic demand

Two-echelon trade credit with default risk in an EOQ model for deteriorating items under dynamic demand

A Mathematical Model of Optimal Manufacturer-Retailer Trade Credit Policy with End-User Credit Support

Neutrosophic Number Optimization Models and Their Application in the Practical Production Process

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