Search Results (4)

This study investigated non-instantaneous deteriorating items because not all products deteriorate immediately. In the high-tech product life cycle, the product demand increases linearly substantially in the growth stage and maintains a near-constant level in the maturity stage. This is a ramp-type demand rate. To satisfy the demand as shortages occur, partial backlogging is necessary. The advance-cash-credit payment scheme, comprising advance, cash, and credit payments, has gained popularity in business transactions to improve cash flow flexibility among supply chain participants. This study explored a partial backlogging inventory model with ramp-type demand for non-instantaneous deteriorating items under generalized payment. The proposed model also incorporated discounted cash flow analysis to account for the time value of the profit function. This study attempted to determine the optimal replenishment strategy to maximize the present value of the total profit. Finally, we conducted a sensitivity analysis to examine the efficacy of the proposed model and gain managerial insights. The optimal total profit rises with an increase in the permissible delay period and sale price but decreases with an increase in ordering and purchase costs. Then, the decision-maker can refer to the managerial insights to choose the appropriate parameter value for the operation. Full article

For generality, we observed that some of the optimization methods lack the mathematical rigor and some of them are based on intuitive arguments which result in the solution procedures being questionable from logical viewpoints of a mathematical analysis such as those in the work by Ouyang et al. (2009). They consider an economic order quantity model for deteriorating items with partially permissible delays in payments linked to order quantity. Basically, their inventory models are interesting, however, they ignore explorations of interrelations of functional behaviors (continuity, monotonicity properties, differentiability, et cetera) of the total cost function to locate the optimal solution, so those shortcomings will naturally influence the implementation of their considered inventory model. Consequently, the main purpose of this paper is to provide accurate and reliable mathematical analytic solution procedures for different scenarios that overcome the shortcomings of Ouyang et al. Full article

The present model develops a three-echelon supply chain, in which the manufacturer offers full permissible delay to the whole seller, while the latter, in turn, adopts distinct trade credit policies for his subsequent downstream retailers. The type of credit policy being offered to the retailers is decided on the basis of their past profiles. Hence, the whole seller puts forth full and partial permissible delays to his old and new retailers respectively. This study considers bad debts from the portion of new retailers who fail to make up for the delayed part of the partial payment. The analysis shows that it is beneficial for the whole seller to make shorter contracts, particularly with new retailers, along with the fetching of a higher fraction of initial purchase cost from them. In addition to the above-described scenario, the lot received by the whole seller from the manufacturer is not perfect, and it contains some defects for which he employs an inspection process before selling the items to the retailers. In order to make the study more realistic, Type-I, as well as Type-II misclassification errors, and the case of out-of-stock are considered. The impact of Type-I error has been found to be crucial in the study. The present paper determines the optimal policy for the whole seller by maximizing the expected total profit per unit time. For the optimality of the solution, theoretical results are provided. Finally, a numerical example and a sensitivity analysis are done to validate the model. Full article

This paper wants to investigate the retailer’s optimal cycle time and optimal payment time under supplier credits including conditionally permissible delay in payments and cash discount depending on retailer payment time. That is, the retailer can obtain fully permissible delay in payments and cash discount if the payment is paid before the period of full delay payments permitted by the supplier. Otherwise, the retailer will just obtain partially permissible delay in payments within the period of partial delay payments permitted by the supplier. The supplier uses this policy to attract retailer to pay the payment as soon as possible to shorten the collection period. One theorem is developed to efficiently determine the optimal replenishment and payment policy for the retailer. Full article