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An EOQ model under retailer partial trade credit policy in supply chain

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  • Huang, Yung-Fu
  • Hsu, Kuang-Hua

Abstract

The main purpose of this paper is to investigate the retailer's inventory policy under two levels of trade credit to reflect the supply chain management situation. In this paper, we assume that the retailer has the powerful decision-making right. So, we extend the assumption that the retailer can obtain the full trade credit offered by the supplier and the retailer just offers the partial trade credit to his/her customer. Then, we investigate the retailer's inventory system as a cost minimization problem to determine the retailer's optimal inventory policy under the supply chain management. Two easy-to-use theorems are developed to efficiently determine the optimal inventory policy for the retailer. We deduce some previously published results of other researchers as special cases. Finally, numerical examples are given to illustrate the theorems and obtain a lot of managerial phenomena.

Suggested Citation

  • Huang, Yung-Fu & Hsu, Kuang-Hua, 2008. "An EOQ model under retailer partial trade credit policy in supply chain," International Journal of Production Economics, Elsevier, vol. 112(2), pages 655-664, April.
    • Handle: RePEc:eee:proeco:v:112:y:2008:i:2:p:655-664
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    References listed on IDEAS

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    1. Jamal, A. M. M. & Sarker, Bhaba R. & Wang, Shaojun, 2000. "Optimal payment time for a retailer under permitted delay of payment by the wholesaler," International Journal of Production Economics, Elsevier, vol. 66(1), pages 59-66, June.
    2. Chung, Kun-Jen & Huang, Yung-Fu, 2003. "The optimal cycle time for EPQ inventory model under permissible delay in payments," International Journal of Production Economics, Elsevier, vol. 84(3), pages 307-318, June.
    3. Chung, Kun-Jen & Goyal, Suresh Kumar & Huang, Yung-Fu, 2005. "The optimal inventory policies under permissible delay in payments depending on the ordering quantity," International Journal of Production Economics, Elsevier, vol. 95(2), pages 203-213, February.
    4. Salameh, M. K. & Abboud, N. E. & El-Kassar, A. N. & Ghattas, R. E., 2003. "Continuous review inventory model with delay in payments," International Journal of Production Economics, Elsevier, vol. 85(1), pages 91-95, July.
    5. Chang, Chun-Tao, 2004. "An EOQ model with deteriorating items under inflation when supplier credits linked to order quantity," International Journal of Production Economics, Elsevier, vol. 88(3), pages 307-316, April.
    6. J-T Teng, 2002. "On the economic order quantity under conditions of permissible delay in payments," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(8), pages 915-918, August.
    7. Chung, Kun-Jen & Liao, Jui-Jung, 2006. "The optimal ordering policy in a DCF analysis for deteriorating items when trade credit depends on the order quantity," International Journal of Production Economics, Elsevier, vol. 100(1), pages 116-130, March.
    8. Huang, Yung-Fu, 2007. "Economic order quantity under conditionally permissible delay in payments," European Journal of Operational Research, Elsevier, vol. 176(2), pages 911-924, January.
    9. Liao, Hung-Chang & Tsai, Chih-Hung & Su, Chao-Ton, 2000. "An inventory model with deteriorating items under inflation when a delay in payment is permissible," International Journal of Production Economics, Elsevier, vol. 63(2), pages 207-214, January.
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