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Supply chain model with price- and trade credit-sensitive demand under two-level permissible delay in payments

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  • B.C. Giri
  • T. Maiti

Abstract

This article develops a single-manufacturer and single-retailer supply chain model under two-level permissible delay in payments when the manufacturer follows a lot-for-lot policy in response to the retailer's demand. The manufacturer offers a trade credit period to the retailer with the contract that the retailer must share a fraction of the profit earned during the trade credit period. On the other hand, the retailer provides his customer a partial trade credit which is less than that of the manufacturer. The demand at the retailer is assumed to be dependent on the selling price and the trade credit period offered to the customers. The average net profit of the supply chain is derived and an algorithm for finding the optimal solution is developed. Numerical examples are given to demonstrate the coordination policy of the supply chain and examine the sensitivity of key model-parameters.

Suggested Citation

  • B.C. Giri & T. Maiti, 2013. "Supply chain model with price- and trade credit-sensitive demand under two-level permissible delay in payments," International Journal of Systems Science, Taylor & Francis Journals, vol. 44(5), pages 937-948.
    • Handle: RePEc:taf:tsysxx:v:44:y:2013:i:5:p:937-948
    DOI: 10.1080/00207721.2011.649367
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    Citations

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    Cited by:

    1. Chuan Zhang & Yu-xin Tian & Ling-wei Fan & Shu-min Yang, 2021. "Optimal ordering policy for a retailer with consideration of customer credit under two-level trade credit financing," Operational Research, Springer, vol. 21(4), pages 2409-2432, December.
    2. Jafar Heydari, 2015. "Coordinating replenishment decisions in a two-stage supply chain by considering truckload limitation based on delay in payments," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(10), pages 1897-1908, July.
    3. Anil K. Agrawal & Amit Ambar Gupta & Manu K. Vora, 2021. "Optimal pricing and lot-sizing policies under promotional expense for some Veblen products," OPSEARCH, Springer;Operational Research Society of India, vol. 58(1), pages 83-108, March.
    4. Juanjuan Qin & Xiaojian Bai & Liangjie Xia, 2015. "Sustainable Trade Credit and Replenishment Policies under the Cap-And-Trade and Carbon Tax Regulations," Sustainability, MDPI, vol. 7(12), pages 1-22, December.
    5. Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi & Nematollahi, Mohammadreza & Goh, Mark & Ignatius, Joshua, 2018. "Bi-level credit period coordination for periodic review inventory system with price-credit dependent demand under time value of money," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 270-291.
    6. Umakanta Mishra & Abu Hashan Md Mashud & Ming-Lang Tseng & Jei-Zheng Wu, 2021. "Optimizing a Sustainable Supply Chain Inventory Model for Controllable Deterioration and Emission Rates in a Greenhouse Farm," Mathematics, MDPI, vol. 9(5), pages 1-23, February.
    7. Dega Nagaraju & A. Ramakrishna Rao & S. Narayanan & P. Pandian, 2016. "Optimal cycle time and inventory decisions in coordinated and non-coordinated two-echelon inventory system under inflation and time value of money," International Journal of Production Research, Taylor & Francis Journals, vol. 54(9), pages 2709-2730, May.
    8. Phan, Dinh Anh & Hovelaque, Vincent & Viviani, Jean-Laurent, 2023. "Integrating point-of-sale financing into the coordination of a price and credit dependent e-commerce supply chain," International Journal of Production Economics, Elsevier, vol. 259(C).
    9. Bi, Gongbing & Wang, Pingfan & Wang, Dujuan & Yin, Yunqiang, 2021. "Optimal credit period and ordering policy with credit-dependent demand under two-level trade credit," International Journal of Production Economics, Elsevier, vol. 242(C).
    10. Mu, Xiuqing & Kang, Kai & Zhang, Jing, 2022. "Dual-channel supply chain coordination considering credit sales competition," Applied Mathematics and Computation, Elsevier, vol. 434(C).
    11. Lihong Wei & Jiaping Xie & Weijun Zhu & Qinglin Li, 2023. "Pricing of platform service supply chain with dual credit: Can you have the cake and eat it?," Annals of Operations Research, Springer, vol. 321(1), pages 589-661, February.
    12. Nita Shah, 2015. "Retailer’s replenishment and credit policies for deteriorating inventory under credit period-dependent demand and bad-debt loss," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 23(1), pages 298-312, April.

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