scholarly journals Two – Warehouse Inventory System Model for Deteriorating Items Considering Partial Upstream Trade Credit Financing

2021 ◽  
pp. 69-80
Author(s):  
Z. H. Aliyu ◽  
B. Sani
Keyword(s):  
Sensitivity Analysis ◽  
Credit Risk ◽  
Trade Credit ◽  
Optimal Solution ◽  
Inventory System ◽  
System Model ◽  
Credit Period ◽  
Business Transaction ◽  
Credit Financing ◽  
Relevant Cost

In this study, we developed an inventory system model under two – level trade credit where the supplier considers the retailer as credit risk but the retailer considers the customers as credit worthy. Therefore, the retailer is given a trade credit period on  proportion of the goods ordered whenever he/she pays for proportion of the goods immediately after delivery. In the same vein, the retailer passes the same grace to the customers but without attaching any condition as the customers are assumed credit worthy. This partial upstream trade credit is offered to reduce the risk of failure in payment on the business transaction especially that most retailers are involved in bulk orders. The relevant cost functions are determined and a numerical example is given. Sensitivity analysis was carried out to see the effect of changes in parameters on the optimal solution of the model.

scholarly journals An Inventory System for Deteriorating Products with Ramp-Type Demand Rate under Two-Level Trade Credit Financing

2011 ◽  
Vol 2011 ◽  
pp. 1-15 ◽  
Author(s):  
G. Darzanou ◽  
K. Skouri
Keyword(s):  
Existence And Uniqueness ◽  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Inventory System ◽  
Credit Policy ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Credit Financing ◽  
Ramp Type Demand

An inventory system for deteriorating products, with ramp-type demand rate, under two-level trade credit policy is considered. Shortages are allowed and partially backlogged. Sufficient conditions of the existence and uniqueness of the optimal replenishment policy are provided, and an algorithm, for its determination, is proposed. Numerical examples highlight the obtained results, and sensitivity analysis of the optimal solution with respect to major parameters of the system is carried out.

Optimal replenishment and credit policy in an inventory model for deteriorating items under two-levels of trade credit policy when demand depends on both time and credit period involving default risk

2018 ◽  
Vol 52 (4-5) ◽  
pp. 1175-1200 ◽  
Author(s):  
Avik Mukherjee ◽  
Gour Chandra Mahata
Keyword(s):  
Default Risk ◽  
Trade Credit ◽  
Optimal Solution ◽  
Deteriorating Items ◽  
Dynamic Decision Making ◽  
Credit Policy ◽  
Credit Period ◽  
Deterioration Rate ◽  
Demand Rate ◽  
Credit Financing

In this paper, we examine an optimal dynamic decision-making problem for a retailer’s inventory system of deteriorating items under two-level trade credit financing where the supplier, as well as the retailer, offers trade credit to the subsequent downstream member, the demand rate of which varies simultaneously with time and the length of credit period that is offered to the customers. The deterioration rate is non-decreasing over time. In addition, the risk of default increases with the credit period length. A generalized model is presented to determine the optimal trade credit and replenishment strategies that maximize the retailer’s annual total profit. We then demonstrate that the retailer’s optimal credit period and replenishment cycle time not only exist but also are unique. Thus, the search of the global optimal solution reduces to finding a local solution. Finally, we run several numerical examples to illustrate the problem and gain managerial insights.

Fuzzy-Based EOQ Model With Credit Financing and Backorders Under Human Learning

2021 ◽  
Vol 10 (4) ◽  
pp. 14-36
Author(s):  
Mahesh Kumar Jayaswal ◽  
Mandeep Mittal ◽  
Isha Sangal ◽  
Jayanti Tripathi
Keyword(s):  
Trade Credit ◽  
Planning Horizon ◽  
Human Learning ◽  
Lead Times ◽  
Credit Period ◽  
Eoq Model ◽  
Triangular Numbers ◽  
Credit Financing ◽  
Fuzzy Cost ◽  
The Impact

In this paper, an inventory model has been developed with trade credit financing and back orders under human learning. In this model, it is considered that the seller provides a credit period to his buyer to settle the account and the buyer accepts the credit period policy with certain terms and conditions. The impact of learning and credit financing on the size of the lot and the corresponding cost has been presented. For the development of the model, demand and lead times have been taken as the fuzzy triangular numbers are fuzzified, and then learning has been done in the fuzzy numbers. First of all, the consideration of constant fuzziness is relaxed, and then the concept of learning in fuzzy under credit financing is joined with the representation, assuming that the degree of fuzziness reduces over the planning horizon. Finally, the expected total fuzzy cost function is minimized with respect to order quantity and number of shipments under credit financing and learning effect. Lastly, sensitive analysis has been presented as a consequence of some numerical examples.

Optimal Ordering for Deteriorating Items of Fixed-Life with Quadratic Demand and Two-Level Trade Credit

2016 ◽  
pp. 1-16 ◽  
Author(s):  
Nita H. Shah ◽  
Mrudul Yogeshkumar Jani
Keyword(s):  
Sensitivity Analysis ◽  
Decision Maker ◽  
Trade Credit ◽  
Life Time ◽  
Deteriorating Items ◽  
Total Cost ◽  
Credit Period ◽  
Numerical Examples ◽  
Optimal Ordering ◽  
Purchase Quantity

This chapter studies the retailer's ordering policies when items in the stocking system has fixed life time and subject to deteriorate with time. The demand is considered to be quadratically decreasing. The supplier offers credit period to the retailer which in turn is partially passed on to customer. The retailer is the decision maker and the objective is to minimize the total cost of the system by ordering optimum purchase quantity. Numerical examples are given to find the best possible scenario for the retailer. Sensitivity analysis is carried out to derive player's insights.

Retailer’s Ordering Policy in a Supply Chain when Demand is Price and Credit Period Dependent

2011 ◽  
Vol 2 (4) ◽  
pp. 61-74 ◽  
Author(s):  
Chandra K. Jaggi ◽  
Amrina Kausar
Keyword(s):  
Sensitivity Analysis ◽  
Trade Credit ◽  
Credit Policy ◽  
Great Role ◽  
Credit Period ◽  
Numerical Examples ◽  
On Demand ◽  
Partial Trade Credit ◽  
Full Credit ◽  
Ordering Policy

Trade credit is a well established promotional tool in the present competitive world and its impact on demand cannot be ignored. Businesses often use trade credit to increase their market share and, in turn, the profit. Undoubtedly, trade credit plays a great role in increasing the demand but it also involves a great risk of non-payment. In order to reduce the risk of non-payment, businessman at times use a partial trade credit policy in which they demand a certain percentage of the total amount from the customer at the time of purchase and offers the credit for the remaining amount. Furthermore, it is also observed that the demand of FMCG is highly price sensitive. In order to see the effect of credit and price together, on demand, the retailer’s demand is taken as a function of price and credit period. Moreover it is assumed that the supplier offers the full credit to the retailer but the retailer passes a partial credit to customers. The inventory model, determines the optimal replenishment time, credit period, and price for the retailer that maximizes profit. Numerical examples have been provided to support the model followed by the comprehensive sensitivity analysis.

scholarly journals A Global Optimizing Policy for Decaying Items with Ramp-Type Demand Rate under Two-Level Trade Credit Financing Taking Account of Preservation Technology

2013 ◽  
Vol 2013 ◽  
pp. 1-12 ◽  
Author(s):  
S. R. Singh ◽  
Swati Sharma
Keyword(s):  
Trade Credit ◽  
Sufficient Conditions ◽  
Optimal Solution ◽  
Credit Policy ◽  
Preservation Technology ◽  
Replenishment Policy ◽  
Demand Rate ◽  
Credit Financing ◽  
Delay In Payments ◽  
Ramp Type Demand

An inventory system for deteriorating items, with ramp-type demand rate, under two-level trade credit policy taking account of preservation technology is considered. The objective of this study is to develop a deteriorating inventory policy when the supplier provides to the retailer a permissible delay in payments, and during this credit period, the retailer accumulates the revenue and earns interest on that revenue; also the retailer invests on the preservation technology to reduce the rate of product deterioration. Shortages are allowed and partially backlogged. Sufficient conditions of the existence and uniqueness of the optimal replenishment policy are provided, and an algorithm, for its determination, is proposed. Numerical examples draw attention to the obtained results, and the sensitivity analysis of the optimal solution with respect to leading parameters of the system is carried out.

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