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Online-Retail Supply Chain Optimization with Credit Period and Selling Price-Dependent Demand

Author

Listed:
  • Chunming Xu

    (Institute of Operations Research and Systems Engineering, College of Science, Tianjin University of Technology, Tianjin 300384, P. R. China)

  • Changlong Wang

    (School of Computer Science and Engineering, Tianjin University of Technology, Tianjin 300384, P. R. China)

  • Jie Ren

    (School of Computer Science and Engineering, Tianjin University of Technology, Tianjin 300384, P. R. China)

  • Linyao Kang

    (School of Computer Science and Engineering, Tianjin University of Technology, Tianjin 300384, P. R. China)

  • Donglei Du

    (Faculty of Management, University of New Brunswick, Fredericton, NB, Canada E3B 9Y2, Canada)

Abstract

Credit payment strategies have been implemented widely in the online retail industry. This work studies an online-retail supply chain involving credit period and selling price-dependent demands. The participants of the supply chain form a Stackelberg game where the supplier as a follower sells products to the customers through an online platform provider, who as a leader provides a credit period to customers and charges the supplier based on the quantity of goods sold. We study and compare the supply chains when the online platform provider adopts the cash payment and credit payment strategies, respectively, to investigate the effects of the credit period, the selling price and the default risk on supply chain system performance. We also investigate these supply chains under both the centralized and decentralized settings and provide an example to illustrate a simple allocation mechanism to coordinate the decentralized supply chain. Finally, an extension of the supply chain with credit payment is given.

Suggested Citation

  • Chunming Xu & Changlong Wang & Jie Ren & Linyao Kang & Donglei Du, 2023. "Online-Retail Supply Chain Optimization with Credit Period and Selling Price-Dependent Demand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 40(01), pages 1-24, February.
    • Handle: RePEc:wsi:apjorx:v:40:y:2023:i:01:n:s0217595922400048
    DOI: 10.1142/S0217595922400048
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