Optimal Ordering Strategy of a Replenishment Policy for Deteriorating Items Under Retailer’s Partial Trade Credit Policy

2011 ◽  
Vol 2 (2) ◽  
pp. 78-94 ◽  
Author(s):  
Gour Chandra Mahata ◽  
Puspita Mahata
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Trade Credit ◽  
Cost Minimization ◽  
Deteriorating Items ◽  
Variable Cost ◽  
Inventory Policy ◽  
Chain Management ◽  
Partial Trade Credit ◽  
Replenishment Policy

This paper investigates the economic order quantity inventory model for a retailer under two levels of trade credit to reflect the supply chain management situation. It is assumed that the retailer maintains a powerful position and can obtain full trade credit offered by supplier, yet the retailer just offers the partial trade credit to customers. Under these conditions, the retailer can obtain the most benefits. This study also investigates the retailer’s inventory policy for deteriorating items in a supply chain management situation as a cost minimization problem. The present study shows that the annual total variable cost for the retailer is convex, that is, a unique solution exists. Mathematical theorems and algorithms are developed to efficiently determine the optimal inventory policy for the retailer. The results in this paper generalize some already published results. Finally, numerical examples are given to illustrate the theorems and obtain managerial phenomena.

Optimal Ordering Strategy of a Replenishment Policy for Deteriorating Items under Retailer’s Partial Trade Credit Policy

2012 ◽  
pp. 186-202
Author(s):  
Gour Chandra Mahata ◽  
Puspita Mahata
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Trade Credit ◽  
Deteriorating Items ◽  
Variable Cost ◽  
Inventory Policy ◽  
Chain Management ◽  
Partial Trade Credit ◽  
Full Trade Credit ◽  
Cost Minimization Problem

This paper investigates the economic order quantity inventory model for a retailer under two levels of trade credit to reflect the supply chain management situation. It is assumed that the retailer maintains a powerful position and can obtain full trade credit offered by supplier, yet the retailer just offers the partial trade credit to customers. Under these conditions, the retailer can obtain the most benefits. This study also investigates the retailer’s inventory policy for deteriorating items in a supply chain management situation as a cost minimization problem. The present study shows that the annual total variable cost for the retailer is convex, that is, a unique solution exists. Mathematical theorems and algorithms are developed to efficiently determine the optimal inventory policy for the retailer. The results in this paper generalize some already published results. Finally, numerical examples are given to illustrate the theorems and obtain managerial phenomena.

Supply Chain Globalization and the Complexities of Cost-Minimization Strategies

2005 ◽  
pp. 109-143
Author(s):  
Brian A. Polin ◽  
Marvin D. Troutt ◽  
William Acar
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Cost Minimization ◽  
Perceived Quality ◽  
Poor Quality ◽  
Global Integration ◽  
Political Debate ◽  
Chain Management ◽  
Multiple Markets ◽  
High Degree

We review the evolving literature on globalization with three aims in mind. First, we introduce the concept of globalization within the context of supply chain management. Second, with an eye toward information that may be useful for supply chain planners, we detail the motivation for global integration of the supply chain. Our third aim is to address global supply-chain issues that may be at odds with cost-minimizing strategies. Specifically, in this time of political debate regarding trade legislation, these issues involve the consideration of country of origin when sourcing, and the disparate demands of customers when marketing. A country offering inexpensive components may be associated with poor quality. Thus, despite inexpensive inputs, the overall profitability of the supply chain may suffer as perceived quality deteriorates. Similarly, a largely standardized product across multiple markets may present the lowest cost alternative from a production standpoint, but a high degree of standardization may reduce the attractiveness of the product in the eyes of the end consumer, and reduce overall profitability.

scholarly journals Ordering Policies of a Deteriorating Item in an EOQ Model under Upstream Partial Order-Quantity-Dependent Trade Credit and Downstream Full Trade Credit

2021 ◽  
Vol 2021 ◽  
pp. 1-13
Author(s):  
Zohreh Molamohamadi ◽  
Abolfazl Mirzazadeh
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Inventory Systems ◽  
Order Quantity ◽  
Credit Period ◽  
Eoq Model ◽  
Partial Trade Credit ◽  
Replenishment Policy ◽  
Full Trade Credit ◽  
Credit Contract

In the classical inventory systems, the retailer had to settle the accounts of the purchased items at the time they were received. But in practice, the supplier applies some strategic tools, such as trade credit contract, to enhance his sales channel and offers delay period to his customers to settle the account. Any member of the supply chain may offer full or partial trade credit contract to his downstream level. Full trade credit is the case that the latter is allowed to defer the whole payment to the end of the credit period. In partial trade credit, however, the downstream supply chain member must pay for a proportion of the purchased goods at first and can delay paying for the rest until the end of the credit period. This paper considers a two-level trade credit, where the supplier offers order-quantity-dependent partial trade credit to a retailer, who suggests full trade credit to his customers. An economic order quantity (EOQ) inventory model of a deteriorating item is formulated here, and the Branch and Reduce Optimization Navigator is applied to find the optimal replenishment policy. The sensitivity of the variables on different parameters has been analyzed by applying some numerical examples. The data reveal that increasing the credit periods of the retailer and the customers can decrease and increase the retailer’s total cost, respectively.

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