A credit policy approach in a two-warehouse inventory model for deteriorating items with price- and stock-dependent demand under partial backlogging

Panda, Gobinda Chandra; Khan, Md. Mobarak Hossain; Shaikh, Ali Akbar

doi:10.1007/s40092-018-0269-3

Cited by 71 publications

(23 citation statements)

References 39 publications

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“…The change in a substitute product's stock level could alter quantity demanded for another good. Panda et al (2019) combined the three factors: price, stock, and trade credit in a two-warehouse inventory analysis.…”

Section: Trade Creditmentioning

confidence: 99%

Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme

et al. 2019

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Recently, market globalization and competition have forced companies to find alternative means to boost sales and revenue. The use of the cash flow is increasingly becoming a viable alternative for managers to improve their company's profitability in a supply chain. In today's business transactions, a supplier usually asks a manufacturer to pay via the advance-cash-credit (ACC) payment scheme if the number of goods procured is high. Additionally, product perishability has been considered in an economic production quantity (EPQ) model since it is a real phenomenon. The present work develops an EPQ model for perishable products under the ACC payment scheme. The objective of the proposed model is to determine the optimal selling price and cycle time while maximizing profit under the ACC payment scheme using a discounted cash flow analysis. A nonlinear optimization algorithm is also proposed to solve the problem. In addition, some numerical examples are employed to illustrate the solution approach and show the concavity of the present value of the total annual profit in terms of both selling price and cycle time. The numerical results show that our proposal algorithm could be applied well to solve the problems. In addition, a sensitivity analysis is conducted to obtain some managerial insights. For example, if the impact of advance payment on procurement cost is relatively smaller than that of cash payment, then it is more profitable for the manufacturer to ask for a cash payment than to receive an advance payment and vice versa.

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Section: Trade Creditmentioning

confidence: 99%

Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme

et al. 2019

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“…Recently, Hardik and Ashaba (2018) proposed a joint pricing model for an inventory of deteriorating items with stochastic demand and promotional efforts. In the same context, Panda et al (2019) presented a credit policy approach in a two-warehouse inventory model for deteriorating items with price-and stock-dependent demand under partial backlogging.…”

Section: Literature Reviewmentioning

confidence: 99%

Risk premiums and certainty equivalents of loss-averse newsvendors of bounded utility

Dalalah

2019

J Ind Eng Int

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Loss-averse behavior makes the newsvendors avoid the losses more than seeking the probable gains as the losses have more psychological impact on the newsvendor than the gains. In economics and decision theory, the classical newsvendor models treat losses and gains equally likely, by disregarding the expected utility when the newsvendor is loss-averse. Moreover, the use of unbounded utility to model risk attitudes fails to explain some decision-making paradoxes. In contrast, this paper deals with the utility maximization of the newsvendor using a class of bounded utility functions to study the effect of loss aversion on the newsvendor certainty equivalents and risk premiums. New formulas are introduced to find the utility-optimal order quantity of the normal distribution. The results show that when an exponential loss aversion exists, the classical newsvendor optimal quantity serves as a lower bound when the overage costs are high and as an upper bound when the underage costs are high. In addition, we show that high loss aversion entails higher risk premiums. Similar conclusion holds when the overage/underage costs increase. Higher standard deviations, on the other hand, mean lower utility-optimal quantities and higher risk premiums. The presented formulas are advantageous in finding the optimal order quantities and risk premiums of a stochastic short-shelf life inventory when the loss is a key factor in the decision-making process.

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“…Tiwari et al [46] developed a sustainable inventory model with deteriorating and imperfect quality items considering carbon emission. Panda et al [34] discussed a two-warehouse inventory model with deteriorating items where the demand is price and stock dependent. In the existing literature, there are rich number of works about two-echelon supply chain model, but very few models involve three or more echelons.…”

Section: Introductionmentioning

confidence: 99%

A three-echelon supply chain model with price and two-level quality dependent demand

Roy

Giri

2020

RAIRO-Oper. Res.

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This paper considers a three-echelon supply chain model with one supplier, one manufacturer and one retailer for trading a single product. We assume that the market demand at the retailer’s end is stochastic, but dependent on price and quality of the product. The final product’s quality depends on the manufacturing process and the raw material’s quality. We first develop models for centralized and decentralized scenarios. Then we try to coordinate the decentralized system with some contract mechanism. We show that revenue sharing contract is not able to coordinate the system, but a composite contract comprised of sales rebate and penalty (SRP) with return is able to coordinate the system. Finally, we illustrate the developed model with a numerical example and show the efficiency of SRP with return policy. We graphically show the effects of various model-parameters on the optimal decisions. Most of the existing literature’s focus on the quality of the finished product, but in this model we incorporate the quality of the raw material as a decision variable along with the finished product quality. We also able to coordinate the three echelon model with a composite contract which is seldom addressed in the existing literatures.

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A credit policy approach in a two-warehouse inventory model for deteriorating items with price- and stock-dependent demand under partial backlogging

Cited by 71 publications

References 39 publications

Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme

Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme

Risk premiums and certainty equivalents of loss-averse newsvendors of bounded utility

A three-echelon supply chain model with price and two-level quality dependent demand

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