scholarly journals Advance sustainable inventory management through advertisement and trade-credit policy

2020 ◽  
Author(s):  
Buddhadev Mandal ◽  
Bikash Koli Dey ◽  
Sudhansu Khanra ◽  
Biswajit Sarkar
Keyword(s):  
Inventory Management ◽  
Cycle Time ◽  
Trade Credit ◽  
Main Concern ◽  
Total System ◽  
Global Optimality ◽  
Credit Policy ◽  
Numerical Illustration ◽  
Credit Period ◽  
Advanced System

The concept of advanced sustainable inventory manage- ment, where demand pattern stock level and advertising dependent under trade-credit policy is taking account in this present study. Opti- mal credit period and cycle time are the main objective of this advanced system. A developed solution methodology is derived to show the exis- tence of global optimality under optimum credit period and cycle time. The main concern of this advanced system is to maximize the annual total system pro t of retailer with nite replenishment rate. Numerical illustration are carry forward for di erent cases to prove the stainabil- ity along with real impact of this model. Sensitive analysis for the key parameters is discussed in sensitivity analysis section along with some real \managerial insights".

scholarly journals Sustainable Inventory Management for Environmental Impact through Partial Backordering and Multi-Trade-Credit-Period

2018 ◽  
Vol 10 (12) ◽  
pp. 4761 ◽  
Author(s):  
Biswajit Sarkar ◽  
Waqas Ahmed ◽  
Seok-Beom Choi ◽  
Muhammad Tayyab
Keyword(s):  
Environmental Impact ◽  
Inventory Management ◽  
Trade Credit ◽  
Global Business ◽  
Numerical Illustration ◽  
Defective Items ◽  
Credit Period ◽  
Partial Backordering ◽  
Imperfect Items ◽  
Total Profit

Incorporation of sustainable management for the rework of defective items brings long lasting benefits. In global business, there are situations when the products are procured from a global supplier. There are chances that the received lot may contain a fraction of imperfect products. These imperfect products are still valuable and can be repairable to save the environment. It is sustainable to repair imperfect items in a local repair store as compared to sending it back to the supplier. The cost of carbon emissions is also incorporated in the function to incorporate the environmental impact on total profit. Meanwhile, the supplier also offers a multi-trade-credit-period to the buyer. The developed model is sustainable and reduces the environmental impact as well as benefits for interim financing. This paper has an objective to maximize the total profit by developing a synergic economic order quantity model by considering multi-trade-credit policy, rework, and shortages simultaneously. This model can help in making decisions to enhance the performance of sustainable inventory management by controlling the cycle time and a fraction of time for a global supply chain. A non-derivative approach is employed to develop a closed-form optimal result. The numerical illustration with sensitivity analysis is also drawn to provide managerial insights into real practices.

Retailer’s Ordering and Discounting Policies Under Advance Sales Discount and Trade Credit Based on Sharia

2012 ◽  
Vol 59 (2) ◽  
Author(s):  
Chairul Saleh ◽  
Achmad Chairdino Leuveano ◽  
Reny Lagaida ◽  
Md. Razali Muhammad
Keyword(s):  
Mathematical Model ◽  
Cycle Time ◽  
Trade Credit ◽  
Price Discount ◽  
Inventory Cost ◽  
Conventional Model ◽  
Credit Period ◽  
Model Based ◽  
Advance Sales ◽  
Replenishment Cycle

The use of conventional model to minimize the inventory cost creates a disturbance between the sellers and buyers. It creates a usury since the payment conducts to interest paid and interest earned. In this paper, sharia principle is implemented, that is Bai Al Istishna which allows credit period and margin agreement as the payment. The model is engaged to replenishment cycle time and price discount policy to attract the customer’s demand which based on sharia principle. This paper provides a useful mathematical model based on sharia principles in order to usury/interest can be eliminated in the trading process.

scholarly journals Optimal replenishment, pricing and preservation technology investment policies for non-instantaneous deteriorating items under two-level trade credit policy

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Chandan Mahato ◽  
Gour Chandra Mahata
Keyword(s):  
Trade Credit ◽  
Market Competition ◽  
Deteriorating Items ◽  
Credit Policy ◽  
Business World ◽  
Credit Period ◽  
Technology Investment ◽  
Deterioration Rate ◽  
Preservation Technology ◽  
Preservation Technology Investment

<p style='text-indent:20px;'>In the business world, both the supplier and the retailer accept the credit to make their business position strong, because the credit not only strengthens their business relationships but also increases the scale of their profits. In this paper, we consider an inventory model for non-instantaneous deteriorating items with price sensitive demand, time varying deterioration rate under two-level trade credit policy. Besides, to reduce deterioration rate, retailers invest some cost to prevent product degradation/decay, known as preservation technology, is also inserted. Consumption of such items within shelf life prevents to deterioration, which can be achieved by bulk sale. In order to stimulate the selling, trade-credit policy is also considered here. In the sequel, not only the supplier would offer fixed credit period to the retailer, but retailer also adopt the trade credit policy to the customers in order to promote the market competition. The retailer can accumulate revenue and interest after the customer pays for the amount of purchasing cost to the retailer until the end of the trade credit period offered by the supplier. The main objective is to determine the optimal replenishment, pricing and preservation technology investment strategies including whether or not invest in preservation technology and how much to invest in order to maximize the average profit of the system. It is proved that the optimal replenishment policy not only exists but is unique for any given selling price and preservation technology cost. An algorithm is presented to derive the optimal solutions of the model. Numerous theorems and lemmas have been inserted to obtain the optimal solution. Finally, numerical examples and managerial implications are incorporated to validate the proposed model.</p>

Optimal replenishment decision for retailers with variable demand for deteriorating products under a trade-credit policy

2020 ◽  
Vol 54 (6) ◽  
pp. 1685-1701 ◽  
Author(s):  
Biswajit Sarkar ◽  
Bikash Koli Dey ◽  
Mitali Sarkar ◽  
Sun Hur ◽  
Buddhadev Mandal ◽  
...  
Keyword(s):  
Trade Credit ◽  
Numerical Study ◽  
Global Optimum ◽  
Optimal Decision ◽  
Selling Price ◽  
Credit Policy ◽  
Credit Period ◽  
Deterioration Rate ◽  
Solution Methodology ◽  
Dependent Demand

In this study one obtained the optimal decision of a retailer for the replenishment rate with selling-price and credit-period dependent demand to maximize the profit. A time-varying deterioration rate was considered for those products. A credit-period was offered by the retailer to the end customer to settle the whole payments. The aim of the model was to obtain the maximum profit for the retailer based model. A solution methodology with an algorithm was used to obtain the global optimum profit. An illustrative numerical example was given to test the practical applicability of the model. Numerical study indicated that the profit was at a maximum when the permissible delay-period for payment offered by the suppliers was lies between the permissible delay-time, and the cycle time, offered by the retailer.

Retailer’s Ordering Policy in a Supply Chain when Demand is Price and Credit Period Dependent

2011 ◽  
Vol 2 (4) ◽  
pp. 61-74 ◽  
Author(s):  
Chandra K. Jaggi ◽  
Amrina Kausar
Keyword(s):  
Sensitivity Analysis ◽  
Trade Credit ◽  
Credit Policy ◽  
Great Role ◽  
Credit Period ◽  
Numerical Examples ◽  
On Demand ◽  
Partial Trade Credit ◽  
Full Credit ◽  
Ordering Policy

Trade credit is a well established promotional tool in the present competitive world and its impact on demand cannot be ignored. Businesses often use trade credit to increase their market share and, in turn, the profit. Undoubtedly, trade credit plays a great role in increasing the demand but it also involves a great risk of non-payment. In order to reduce the risk of non-payment, businessman at times use a partial trade credit policy in which they demand a certain percentage of the total amount from the customer at the time of purchase and offers the credit for the remaining amount. Furthermore, it is also observed that the demand of FMCG is highly price sensitive. In order to see the effect of credit and price together, on demand, the retailer’s demand is taken as a function of price and credit period. Moreover it is assumed that the supplier offers the full credit to the retailer but the retailer passes a partial credit to customers. The inventory model, determines the optimal replenishment time, credit period, and price for the retailer that maximizes profit. Numerical examples have been provided to support the model followed by the comprehensive sensitivity analysis.

scholarly journals Mathematical analytic techniques for determining the optimal ordering strategy for the retailer under the permitted trade-credit policy of two levels in a supply chain system

Filomat ◽  
2018 ◽  
Vol 32 (12) ◽  
pp. 4195-4207 ◽  
Author(s):  
Jui-Jung Liao ◽  
Kuo-Nan Huang ◽  
Kun-Jen Chung ◽  
Shy-Der Lin ◽  
Pin-Shou Ting ◽  
...  
Keyword(s):  
Trade Credit ◽  
Real Life ◽  
Optimal Solution ◽  
Credit Policy ◽  
Supply Chain System ◽  
Credit Period ◽  
Sales Revenue ◽  
Replenishment Policy ◽  
Optimal Ordering ◽  
Theoretical Results

In this article, we explore a certain kind of two-level trade credit in order to reflect the real-life situations. With this objective in view, we consider the case when the supplier offers two-level trade credit for the retailer for settling the account. If the retailer pays off all accounts at the end of the first credit period, then he/she can utilize the sales revenue to earn interest until the inventory cycle time. On the other hand, if the retailer cannot pay off the unpaid balance at the end of the first credit period, then he/she can decide to pay off the unpaid balance either after the end of the first credit period or after the second credit period. Here, in this situation, the retailer reduces the financed loan from constant sales and revenue received gradually and he/she still can utilize the sales revenue to earn interest when he/she pays off all accounts. Maximizing the profit is used as the objective to develop the inventory model. Based upon the obtained properties of the optimal solution, two theorems are developed to determine the optimal replenishment policy. Finally, computational developments are presented in order to illustrate numerically the main theoretical results which are proven in this article by using some mathematical solution procedures.

Optimal Inventory and Credit Policies under Two Levels of Trade Credit Financing in an Inventory System with Date-Terms Credit Linked Demand

2014 ◽  
Vol 5 (4) ◽  
pp. 99-126 ◽  
Author(s):  
K.K. Aggarwal ◽  
Arun Kumar Tyagi
Keyword(s):  
Trade Credit ◽  
Credit Policy ◽  
Discounted Cash Flow ◽  
Inventory Policy ◽  
Credit Period ◽  
Systems Perspective ◽  
On Demand ◽  
Proposed Model ◽  
Net Profit ◽  
Credit Financing

Credit policy through its influence on demand indirectly affects the inventory policy which is designed to meet that demand; therefore inventory policy is interrelated with the credit policy. Consequently, they must be coordinated and should be determined simultaneously in a systems perspective. In this paper, a mathematical model is developed in a discounted cash flow (DCF) framework to jointly determine inventory and credit policies under two levels of trade credit financing in the presence of stimulating as well as disintegrating effect of credit period on demand. The objective of the model is to maximize the present value of firm's net profit per unit time by jointly optimizing the date-terms credit period and replenishment interval. Numerical example and sensitivity analysis are presented to illustrate the effectiveness of the proposed model and results are discussed.

scholarly journals Supply Chain Model with Stochastic Lead Time, Trade-Credit Financing, and Transportation Discounts

2017 ◽  
Vol 2017 ◽  
pp. 1-14 ◽  
Author(s):  
Sung Jun Kim ◽  
Biswajit Sarkar
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Trade Credit ◽  
Coordination Mechanism ◽  
Chain Model ◽  
Credit Policy ◽  
Setup Cost ◽  
Credit Period ◽  
Supply Chain Model ◽  
Credit Financing

This model extends a two-echelon supply chain model by considering the trade-credit policy, transportations discount to make a coordination mechanism between transportation discounts, trade-credit financing, number of shipments, quality improvement of products, and reduced setup cost in such a way that the total cost of the whole system can be reduced, where the supplier offers trade-credit-period to the buyer. For buyer, the backorder rate is considered as variable. There are two investments to reduce setup cost and to improve quality of products. The model assumes lead time-dependent backorder rate, where the lead time is stochastic in nature. By using the trade-credit policy, the model gives how the credit-period would be determined to achieve the win-win outcome. An iterative algorithm is designed to obtain the global optimum results. Numerical example and sensitivity analysis are given to illustrate the model.

Optimal replenishment and credit policy in an inventory model for deteriorating items under two-levels of trade credit policy when demand depends on both time and credit period involving default risk

2018 ◽  
Vol 52 (4-5) ◽  
pp. 1175-1200 ◽  
Author(s):  
Avik Mukherjee ◽  
Gour Chandra Mahata
Keyword(s):  
Default Risk ◽  
Trade Credit ◽  
Optimal Solution ◽  
Deteriorating Items ◽  
Dynamic Decision Making ◽  
Credit Policy ◽  
Credit Period ◽  
Deterioration Rate ◽  
Demand Rate ◽  
Credit Financing

In this paper, we examine an optimal dynamic decision-making problem for a retailer’s inventory system of deteriorating items under two-level trade credit financing where the supplier, as well as the retailer, offers trade credit to the subsequent downstream member, the demand rate of which varies simultaneously with time and the length of credit period that is offered to the customers. The deterioration rate is non-decreasing over time. In addition, the risk of default increases with the credit period length. A generalized model is presented to determine the optimal trade credit and replenishment strategies that maximize the retailer’s annual total profit. We then demonstrate that the retailer’s optimal credit period and replenishment cycle time not only exist but also are unique. Thus, the search of the global optimal solution reduces to finding a local solution. Finally, we run several numerical examples to illustrate the problem and gain managerial insights.

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