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Retail Order-Taking Strategies Under Competing Trade Credit Policies With Varying Demands

Author

Listed:
  • Juanjuan Qin

    (School of Business, Tianjin University of Finance and Economics, Tianjin 300222, China)

  • Aina Zhang

    (School of Business, Tianjin University of Finance and Economics, Tianjin 300222, China)

  • Liangjie Xia

    (School of Business, Tianjin University of Finance and Economics, Tianjin 300222, China)

  • Mengqi Liu

    (Business School, Hunan University, Changsha 410082, China)

Abstract

This paper discusses optimal order-taking strategies under competing trade credit policies with varying demands. This study examines three decision-making scenarios, namely, (i) a centralized supply chain, (ii) a decentralized supply chain, and (iii) a coordinated supply chain with a buyback contract. Optimal decisions are obtained for each scenario. We find that if the average forecast value of credit sensitivity is higher than the real value, then the supply chain is at risk of having an overestimated performance; if the average forecast value of credit sensitivity is lower than the actual value, then the supply chain is at risk of having an underestimated performance. As the sensitivity of the credit competition increases, the supply chain’s performance decreases. The supply chain can be coordinated by a buyback contract.

Suggested Citation

  • Juanjuan Qin & Aina Zhang & Liangjie Xia & Mengqi Liu, 2017. "Retail Order-Taking Strategies Under Competing Trade Credit Policies With Varying Demands," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(01), pages 1-17, February.
    • Handle: RePEc:wsi:apjorx:v:34:y:2017:i:01:n:s0217595917400103
    DOI: 10.1142/S0217595917400103
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    References listed on IDEAS

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