Journal Article•
Supply chain inventory model with two levels of trade credit and time varying demand
TL;DR: In this article, the authors developed an optimal supply chain inventory model under two levels of trade credit policy and linear time-varying demand, and an easy method was also shown to find the global optimal inventory policies of the considered problem.
About: This article is published in Systems Engineering - Theory & Practice.The article was published on 2011-01-01 and is currently open access. It has received 2 citations till now. The article focuses on the topics: Trade credit & Inventory theory.
Citations
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01 Jan 2014
TL;DR: In this paper, the trade credit issue, the discount on price of items, the present level of holding capital and some other key factors on business decision are considered, and the retailer's optimal ordering quantity can be characterized by three situations.
Abstract: As competition becomes more intensive and capital issue attracts more attention in the operation, trade credit has become important to achieve competition advantage. This paper considers the trade credit issue, the discount on price of items, the present level of holding capital and some other key factors on business decision. Based on the classical EOQ model, we build a simple but useful mathematic model with the retailer’s capital consideration. The retailer’s optimal ordering quantity can be characterized by three situations. We further do some sensitivity analysis on several main factors. We discuss the influence of the payment delay as well as the present capital on hand on the final decision.
2 citations
01 Jan 2013
TL;DR: In this paper, the authors studied how backorder affects credit cost, established two models considering respectively the existence and absence of communication between suppliers and customers, and under the condition that credit loss affects demand rate, verified the existence of credit cost utilizing numerical calculation.
Abstract: The credit of suppliers is influenced by factors such as quality of products, promptness of delivering, service level, etc. Reduction in credit value can lead to suppliers’ loss of profit, and this profit loss is named credit cost. Putting forward the concept of credit cost for the first time, this paper, starting from delivering situation, studied how backorder affects credit cost, established two models considering respectively the existence and absence of communication between suppliers and customers, and under the condition that credit loss affects demand rate, verified the existence of credit cost utilizing numerical calculation.
References
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TL;DR: In this article, a mathematical model for obtaining the economic order quantity for an item for which the supplier permits a fixed delay in settling the amount owed to him is presented, and an example has been solved to illustrate the method.
Abstract: In this paper, mathematical models have been derived for obtaining the economic order quantity for an item for which the supplier permits a fixed delay in settling the amount owed to him. An example has been solved to illustrate the method.
1,204 citations
TL;DR: This paper incorporates the concept of credit-linked demand and develops a new inventory model under two levels of trade credit policy to reflect the real-life situations and develops an easy-to-use algorithm to determine the optimal credit as well as replenishment policy jointly for the retailer.
229 citations
TL;DR: This paper generalizes the economic order quantity (EOQ) model with permissible delay in payment to reflect real-world situations and derives several theoretical results to determine the optimal solution under various situations.
165 citations
TL;DR: In this article, the authors derived a production model for the lot-size inventory system with finite production rate, taking into consideration the effect of decay and the condition of permissible delay in payments, in which the restrictive assumption of a permissible delay is relaxed to that at the end of the credit period, the retailer will make a partial payment on total purchasing cost to the supplier and pay off the remaining balance by loan from the bank.
111 citations
TL;DR: In contrast to the complicated and tedious quadratic-algebraic method suggested by Huang, the authors proposed a simple arithmetic-geometric method to solve the inventory problem without derivatives.
32 citations