Optimal advance payment scheme involving fixed per-payment costs

Omega ◽  
1996 ◽  
Vol 24 (5) ◽  
pp. 577-582 ◽  
Author(s):  
Alex X. Zhang
Keyword(s):  
Payment Scheme ◽  
Advance Payment

scholarly journals An inventory model for deteriorating items with imperfect quality under advance payment policy

2021 ◽  
Vol 31 (3) ◽  
Author(s):  
Biman Kanti Nath ◽  
Nabendu Sen
Keyword(s):  
Global Maximum ◽  
Inventory Models ◽  
Business World ◽  
Imperfect Quality ◽  
Payment Scheme ◽  
Advance Payment ◽  
Purchase Cost ◽  
Imperfect Items ◽  
Total Profit ◽  
Cash Discount

In the business world, it is generally observed that the supplier gives cash discount due to advance payment. The buyer may either pay off the total purchase cost or a fraction of the total purchase cost before receiving the products. If the buyer makes full payment then he receives a cash discount instantly. If the buyer pays a fraction of the total purchase cost, then (s)he receives the cash discount while paying the remaining amount at the time of receiving the lot. Moreover, in most of the inventory models, it is generally assumed that the delivered lot contains only perfect items. But in reality, presence of imperfect items in the received lot cannot be overlooked as it will affect total profit of the system. Thus, the study of inventory models considering the presence of imperfect items in the lot makes the model more realistic and, it has received much attention from inventory managers. This paper develops a model that jointly considers imperfect quality items and the concept of advance payment scheme (full and partial). The objective is to determine optimal ordering quantity in order to maximise the total profit of the system. The necessary theoretical results showing the existence of global maximum is derived. The model is illustrated with the help of numerical examples, and sensitivity analysis is carried out on some important system parameters to see the effects on the total profit of the system. The study shows that full advance payment scheme is beneficial for the buyer.

Two-warehouse inventory model for deteriorating items with partial backlogging and advance payment scheme

2019 ◽  
Vol 53 (5) ◽  
pp. 1691-1708 ◽  
Author(s):  
Md. Al-Amin Khan ◽  
Ali Akbar Shaikh ◽  
Gobinda Chandra Panda ◽  
Ioannis Konstantaras
Keyword(s):  
Great Influence ◽  
Inventory Model ◽  
Inventory System ◽  
Deteriorating Items ◽  
Optimal Decision ◽  
Selling Price ◽  
Partial Backlogging ◽  
Payment Scheme ◽  
Numerical Result ◽  
Advance Payment

Advance payment has a great influence on making the optimal decision in an inventory system. Two-warehouse inventory system is another imperative factor in inventory analysis. Due to competitive marketing situation, the position of a warehouse performs a significant role in business strategy. Generally, retailers want to find a shop in a popular marketing place. So, they need an additional store room due to insufficient space in a popular marketplace. Also, we have considered the advance payment scheme which is made by equal installment up to n times before receiving the products. Using all of these concepts in together, we have developed a two-warehouse inventory model for deteriorating items with advanced payment scheme. Shortages are allowed with a constant partial backlogging rate. Demand of the product is dependent on selling price. We have presented this physical problem in mathematically and solved. Also, we proved the optimality mathematically as well as graphically and proposed one theorem in order to show the optimality in theoretically. We have supplied a numerical example to illustrate the proposed inventory model. To validate the numerical result of the proposed model, we have plotted 2D and 3D graphs by using MATLAB and observed these satisfy the numerical result. Finally, we have performed sensitivity analysis changing one parameter and keeping others the same.

scholarly journals Optimal Pricing Strategies and Customers’ Equilibrium Behavior in an Unobservable M/M/1 Queueing System with Negative Customers and Repair

2017 ◽  
Vol 2017 ◽  
pp. 1-11 ◽  
Author(s):  
Doo Ho Lee
Keyword(s):  
Queueing System ◽  
Point Of View ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Negative Customers ◽  
Economic Point ◽  
Equilibrium Behavior ◽  
Payment Scheme ◽  
Ex Post ◽  
Pricing Schemes

This work investigates the optimal pricing strategies of a server and the equilibrium behavior of customers in an unobservable M/M/1 queueing system with negative customers and repair. In this work, we consider two pricing schemes. The first is termed the ex-post payment scheme, where the server charges a price that is proportional to the time spent by a customer in the system. The second scheme is the ex-ante payment scheme, where the server charges a flat rate for all services. Based on the reward-cost structure, the server (or system manager) should make optimal pricing decisions in order to maximize its expected profit per time unit in each payment scheme. This study also investigates equilibrium joining/balking behavior under the server’s optimal pricing strategies in the two pricing schemes. We show, given a customer’s equilibrium, that the two pricing schemes are perfectly identical from an economic point of view. Finally, we illustrate the effect of several system parameters on the optimal joining probabilities, the optimal price, and the equilibrium behavior via numerical examples.

A simple micro-payment scheme

2001 ◽  
Vol 55 (3) ◽  
pp. 221-229 ◽  
Author(s):  
Min-Shiang Hwang ◽  
Iuon-Chang Lin ◽  
Li-Hua Li
Keyword(s):  
Payment Scheme

The role of deforestation risk and calibrated compensation in designing payments for environmental services

2008 ◽  
Vol 13 (3) ◽  
pp. 375-394 ◽  
Author(s):  
JENNIFER ALIX-GARCIA ◽  
ALAIN DE JANVRY ◽  
ELISABETH SADOULET
Keyword(s):  
Common Property ◽  
Budget Constraint ◽  
Environmental Services ◽  
Payments For Environmental Services ◽  
Land Productivity ◽  
Payment Scheme ◽  
Payment Schemes ◽  
Using Data ◽  
Poor Communities

ABSTRACTThis paper discusses the gain in efficiency from including deforestation risk as a targeting criterion in payments for environmental services (PES) programs. We contrast two payment schemes that we simulate using data from Mexican common property forests: a flat payment scheme with a cap on allowable hectares per enrollee, similar to the program implemented in many countries, and a payment that takes deforestation risk and heterogeneity in land productivity into account. We simulate the latter strategy both with and without a budget constraint. Using observed past deforestation, we find that while risk-targeted payments are far more efficient, capped flat payments are more egalitarian. We also consider the characteristics of communities receiving payments from both programs. We find that the risk-weighted scheme results in more payments to poor communities, and that these payments are more efficient than those made to non-poor ejidos. Finally, we show that the risk of deforestation can be predicted quite precisely with indicators that are easily observable and that cannot be manipulated by the community.

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