×

zbMATH — the first resource for mathematics

Optimal retailer’s replenishment decisions in the EPQ model under two levels of trade credit policy. (English) Zbl 1110.90007
Summary: The main purpose of this paper is to investigate the optimal retailer’s replenishment decisions under two levels of trade credit policy within the economic production quantity (EPQ) framework. We assume that the supplier would offer the retailer a delay period and the retailer also adopts the trade credit policy to stimulate his/her customer demand to develop the retailer’s replenishment model under a finite replenishment rate. Furthermore, we assume that the retailer’s trade credit period offered by supplier \(M\) is not shorter than the customer’s trade credit period offered by retailer \(N\) \((M \geq N)\). Since the retailer cannot earn any interest in this situation, \(M < N\).
Based upon the above arguments, this paper incorporates both K. J. Chung and Y. F. Huang, The optimal cycle time for EPQ inventory model under permissible delay in payments, Int. J. Production Econ. 84, 307–318 (2003)] and Y. F. Huang [J. Oper. Res. Soc. 54, No. 9, 1011–1015 (2003; Zbl 1097.90501)] under above conditions. In addition, we model the retailer’s inventory system as a cost minimization problem to determine the retailer’s optimal replenishment decisions. Then three theorems are developed to efficiently determine the optimal replenishment decisions for the retailer. We deduce some previously published results of other authors as special cases. Finally, numerical examples are given to illustrate the theorems obtained in this paper. Then, as well as, we obtain a lot of managerial insights from numerical examples.

MSC:
90B05 Inventory, storage, reservoirs
PDF BibTeX XML Cite
Full Text: DOI
References:
[1] Aggarwal, S.P.; Jaggi, C.K., Ordering policies of deteriorating items under permissible delay in payments, Journal of operational research society, 46, 658-662, (1995) · Zbl 0830.90032
[2] Arcelus, F.J.; Shah, N.H.; Srinivasan, G., Retailer’s pricing, credit and inventory policies for deteriorating items in response to temporary price/credit incentives, Journal of production economics, 81-82, 153-162, (2003)
[3] Chand, S.; Ward, J., A note on economic order quantity under conditions of permissible delay in payments, Journal of operational research society, 38, 83-84, (1987) · Zbl 0606.90038
[4] Chang, C.T., An EOQ model with deteriorating items under inflation when supplier credits linked to order quantity, International journal of production economics, 88, 307-316, (2004)
[5] Chang, C.T.; Ouyang, L.Y.; Teng, J.T., An EOQ model for deteriorating items under supplier credits linked to ordering quantity, Applied mathematical modelling, 27, 983-996, (2003) · Zbl 1046.90004
[6] Chang, H.J.; Dye, C.Y., An inventory model for deteriorating items with partial backlogging and permissible delay in payments, International journal of systems science, 32, 345-352, (2001) · Zbl 1006.90002
[7] Chang, H.J.; Hung, C.H.; Dye, C.Y., An inventory model for deteriorating items with linear trend demand under the condition of permissible delay in payments, Production planning & control, 12, 274-282, (2001)
[8] Chen, M.S.; Chuang, C.C., An analysis of light buyer’s economic order model under trade credit, Asia-Pacific journal of operational research, 16, 23-34, (1999)
[9] Chu, P.; Chung, K.J.; Lan, S.P., Economic order quantity of deteriorating items under permissible delay in payments, Computers & operations research, 25, 817-824, (1998) · Zbl 1042.90505
[10] Chung, K.J., A theorem on the determination of economic order quantity under conditions of permissible delay in payments, Computers & operations research, 25, 49-52, (1998) · Zbl 0906.90051
[11] Chung, K.J., Economic order quantity model when delay in payments is permissible, Journal of information & optimization sciences, 19, 411-416, (1998) · Zbl 0952.91051
[12] Chung, K.J., The inventory replenishment policy for deteriorating items under permissible delay in payments, Opsearch, 37, 267-281, (2000) · Zbl 1141.90314
[13] Chung, K.J.; Chang, S.L.; Yang, W.D., The optimal cycle time for exponentially deteriorating products under trade credit financing, The engineering economist, 46, 232-242, (2001)
[14] Chung, K.J.; Huang, Y.F., The optimal cycle time for EPQ inventory model under permissible delay in payments, International journal of production economics, 84, 307-318, (2003)
[15] Chung, K.J.; Liao, J.J., Lot-sizing decisions under trade credit depending on the ordering quantity, Computers & operations research, 31, 909-928, (2004) · Zbl 1048.90016
[16] Goyal, S.K., Economic order quantity under conditions of permissible delay in payments, Journal of operational research society, 36, 335-338, (1985) · Zbl 0568.90025
[17] Huang, Y.F., Optimal retailer’s ordering policies in the EOQ model under trade credit financing, Journal of the operational research society, 54, 1011-1015, (2003) · Zbl 1097.90501
[18] Huang, Y.F., Optimal retailer’s replenishment policy for the EPQ model under supplier’s trade credit policy, Production planning & control, 15, 27-33, (2004)
[19] Huang, Y.F.; Chung, K.J., Optimal replenishment and payment policies in the EOQ model under cash discount and trade credit, Asia-Pacific journal of operational research, 20, 177-190, (2003) · Zbl 1165.90319
[20] Hwang, H.; Shinn, S.W., Retailer’s pricing and lot sizing policy for exponentially deteriorating products under the condition of permissible delay in payments, Computers & operations research, 24, 539-547, (1997) · Zbl 0882.90029
[21] Jamal, A.M.M.; Sarker, B.R.; Wang, S., An ordering policy for deteriorating items with allowable shortages and permissible delay in payment, Journal of operational research society, 48, 826-833, (1997) · Zbl 0890.90049
[22] Jamal, A.M.M.; Sarker, B.R.; Wang, S., Optimal payment time for a retailer under permitted delay of payment by the wholesaler, International journal of production economics, 66, 59-66, (2000)
[23] Kim, J.S.; Hwang, H.; Shinn, S.W., An optimal credit policy to increase wholesaler’s profits with price dependent demand functions, Production planning & control, 6, 45-50, (1995)
[24] Liao, H.C.; Tsai, C.H.; Su, C.T., An inventory model with deteriorating items under inflation when a delay in payment is permissible, International journal of production economics, 63, 207-214, (2000)
[25] Salameh, M.K.; Abboud, N.E.; El-Kassar, A.N.; Ghattas, R.E., Continuous review inventory model with delay in payments, International journal of production economics, 85, 91-95, (2003)
[26] Sarker, B.R.; Jamal, A.M.M.; Wang, S., Supply chain model for perishable products under inflation and permissible delay in payment, Computers & operations research, 27, 59-75, (2000) · Zbl 0935.90013
[27] Sarker, B.R.; Jamal, A.M.M.; Wang, S., Optimal payment time under permissible delay in payment for products with deterioration, Production planning & control, 11, 380-390, (2000)
[28] Shah, N.H., A lot-size model for exponentially decaying inventory when delay in payments is permissible, Cahiers du CERO, 35, 115-123, (1993) · Zbl 0795.90009
[29] Shawky, A.I.; Abou-El-Ata, M.O., Constrained production lot-size model with trade-credit policy: ’A comparison geometric programming approach via lagrange’, Production planning & control, 12, 654-659, (2001)
[30] Shinn, S.W.; Hwang, H., Optimal pricing and ordering policies for retailers under order-size-dependent delay in payments, Computers and operations research, 30, 35-50, (2003) · Zbl 1029.90008
[31] Teng, J.T., On the economic order quantity under conditions of permissible delay in payments, Journal of the operational research society, 53, 915-918, (2002) · Zbl 1098.90006
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.