Retailer's optimal strategy for a perishable product with increasing demand under various payment schemes

Yan, Shi; Zhang, Zhiyong; Tiwari, Sunil; Tao, Zhiwen

doi:10.1007/s10479-021-04074-4

Cited by 7 publications

(5 citation statements)

References 46 publications

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“…Several sources show that the inventory (Gharaei et al 2019;Kazemi et al 2018), order quantity (Giri and Masanta 2020;Shekarabi et al 2019), product price and quality (Duan et al 2018;Shah et al 2020) in the process of production and operation will have an impact on the overall and individual profits of the supply chain. The research of DD in the production and operation area mainly includes the discount and payment methods, discount, inventory, transportation management, and discount and product quality (Jaggi et al 2017;Jana and Das 2017;Shi et al 2021). However, in the actual business activities, collaboration, price strategy, and product quality cannot be altered rapidly by SMEs.…”

Section: Supply Chain Finance and Dynamic Discounting Programmentioning

confidence: 99%

Dynamic discounting program of supply chain finance based on a financial information matching platform

2022

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The dynamic discounting (DD) program based on the financial information matching platform (FIMP) is an emerging but underexplored supply chain finance (SCF) model. This study explores the configuration and operation of the DD program, compares and analyzes the DD decision between the traditional model and the FIMP-based DD model, and reveals how the latter model improves the cash flow of participants. Compared with the traditional model, the FIMP-based DD model can improve the accuracy of the daily discount rate for small and medium-sized enterprises; it offers enterprises more capital sources and helps participants determine an optimal payment period. There are three major contributions of this study. First, it explores the mechanism of the platform in promoting the DD model. The DD program is not participated in by a single buyer and supplier, but by one buyer with multiple (N ) suppliers based on an FIMP. Once the fundamental decision parameters can be met, several suppliers can enjoy early payment from a specific buyer, thereby improving liquidity of the benefitting participants. Second, the study offers important managerial insights. Suppliers can calculate the discount rate to motivate buyers' early payment choices. Besides, early payments could be constituted from a mixed portfolio with buyer's own capital and that from financial institutions. Third, the study explores key parameters. The discount rate is not only related to the cost of working capital but also to the financing costs. Based on the varying relationships between discount rate and capital costs, the present study makes a reasonable argument for the use of mixed funds and then calculates the optimal early payment period. Finally, this study conducts a sensitivity analysis with numerical examples, which finds that, by adopting the FIMP-based DD program, both buyers and suppliers enjoy a fairer procurement environment and more profitable multi-lateral relationships.

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Section: Supply Chain Finance and Dynamic Discounting Programmentioning

confidence: 99%

Dynamic discounting program of supply chain finance based on a financial information matching platform

2022

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“…This study aims to identify the optimal replenishment cycle time and predictive maintenance effort to minimize the present value of the total cost. Several other noteworthy and pertinent studies on advance payment have been conducted, including those by Li et al [41], Wu et al [42], Chang et al [43], Shi et al [12], Taleizadeh et al [44], and Shi et al [45].…”

Section: Introductionmentioning

confidence: 99%

“…Li and Teng [48] examined pricing and lot-sizing strategies in scenarios where demand is influenced by reference price, selling price, product freshness, and displayed stocks, while Shi et al [12] formulated a supply chain model suitable for situations where the demand for perishable goods is contingent on both stock age and selling price. Other notable studies which consider the relationship between product freshness and expiration date include the works of Wang et al [49], Wu et al [42], Taleizadeh et al [50], and Shi et al [45]. With this literature in mind, it is reasonable to assume that the demand for perishable goods can be modeled as a function of both unit price and stock age.…”

Section: Introductionmentioning

confidence: 99%

The Impacts of Payment Schemes and Carbon Emission Policies on Replenishment and Pricing Decisions for Perishable Products in a Supply Chain

Chang,

Tseng

2024

Mathematics

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In the supplier–retailer–consumer system, the retailer’s replenishment and pricing strategies impact the entire transaction process, forming a comprehensive trading market. Suppliers offer advance-cash-credit payments to retailers, while retailers provide customers with cash-credit payment options. In the current health-conscious consumer market, purchasing decisions are influenced not only by commodity prices but also by the freshness of products, particularly perishable goods. Growing awareness of climate change and the advent of carbon emission policies have raised concerns about the environmental costs of business transactions. This study focuses on perishable products whose demand is influenced by both price and freshness. It explores the adoption of various payment methods by suppliers and retailers, as well as the impact of carbon emission cap-and-trade policies or carbon tax policies on management and pricing strategies. Suitable inventory models are established to determine the optimal replenishment and pricing strategies for maximizing the current value of total profit. We illustrate that the current value of total profit demonstrates joint concavity concerning both the selling price and the replenishment time. Finally, we verify the proposed models using numerical examples and present the findings of sensitivity analyses. The findings of this study yield several valuable insights for inventory management of perishable goods.

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“…However, addressing a fuzzy demand rather than static demand is considered [8]. Through an EOQ model, we know that retailers or buyers pay a constant carbon tax, and buyers can use one of three forms of payment to pay: cash payment, advance payment, or credit payment [9]. Credit transactions seem to be the most economical and effective of the multiple payment alternatives for lowering carbon emissions and maintaining the environment.…”

Section: Introductionmentioning

confidence: 99%

A Supply Chain Inventory Model for a Deteriorating Material under a Finite Planning Horizon with the Carbon Tax and Shortage in All Cycles

Mishra¹,

Ranu²

2023

JESA

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We have framed an inventory replenishment model under a finite planning horizon in which replenishment cycle time and replenishment cycle length are different and don't repeat. The finite planning horizon for different replenishment times and cycle lengths is a real-life scenario. Nowadays, every manufacturing industry wants to achieve maximum profit at a low cost. It is very difficult to maintain the optimal level of inventory, total cost, replenishment time, and replenishment cycle. Along with the health of people, increasing carbon emission also has a dangerous effect on today's business environment. Therefore, this article analyses an optimal inventory replenishment policy and carbon emission due to deteriorating material and refrigeration while taking into account time, emissiondependent, and inventory-dependent quadratic demand. Materials deterioration affects a large and varied spectrum of business. Therefore, Material that suffers deterioration is considered. Shortage, some lost sales, and partial backlogging are also considered. Backlogging is dependent on the frequency of the waiting period for the next replenishment over a given finite time horizon and fluctuating replenishment cycle. The model has been developed theoretically. Also, a mathematical formulation has been obtained to find the optimal solution to the problem. Following the algorithm, a numerical illustration and a comparative evaluation are explained, along with a sensitivity analysis of each parameter. The tabular and graphical representations of sensitivity analysis were addressed using the Mathematica application version 12.

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Retailer's optimal strategy for a perishable product with increasing demand under various payment schemes

Cited by 7 publications

References 46 publications

Dynamic discounting program of supply chain finance based on a financial information matching platform

Dynamic discounting program of supply chain finance based on a financial information matching platform

The Impacts of Payment Schemes and Carbon Emission Policies on Replenishment and Pricing Decisions for Perishable Products in a Supply Chain

A Supply Chain Inventory Model for a Deteriorating Material under a Finite Planning Horizon with the Carbon Tax and Shortage in All Cycles

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