A lot sizing model with partial downstream delayed payment, partial upstream advance payment, and partial backordering for deteriorating items

Diabat, Ali; Taleizadeh, Ata Allah; Lashgari, Mohsen

doi:10.1016/j.jmsy.2017.04.005

Cited by 74 publications

(33 citation statements)

References 57 publications

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“…The station first pays a fraction of the purchasing cost in advance while taking an order, and then pays the remainder via cash on delivery. Recently, Taleizadeh (2017) and Diabat et al (2017) considered advance payment in the lot-size model under different conditions of the inventory model.…”

Section: Advance Paymentmentioning

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: Advance Paymentmentioning

confidence: 99%

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

et al. 2019

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“…Kim and Sarkar [36] converted the basic single-stage production system to the multi-stage production system where they did not consider initial production and then demand. Diabat et al [37] extended the basic production model with partial downstream down payment. Kang et al [38] explained the effect of smart manufacturing technology based on the human quality control system.…”

Section: Literature Reviewmentioning

confidence: 99%

A Single-Stage Manufacturing Model with Imperfect Items, Inspections, Rework, and Planned Backorders

et al. 2019

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Each industry prefers to sell perfect products in order to maintain its brand image. However, due to a long-run single-stage production system, the industry generally obtains obstacles. To solve this issue, a single-stage manufacturing model is formulated to make a perfect production system without defective items. For this, the industry decides to stop selling any products until whole products are ready to fulfill the order quantity. Furthermore, manufacturing managers prefer product qualification from the inspection station especially when processes are imperfect. The purpose of the proposed manufacturing model considers that the customer demands are not fulfilled during the production phase due to imperfection in the process, however customers are satisfied either at the end of the inspection process or after reworking the imperfect products. Rework operation, inspection process, and planned backordering are incorporated in the proposed model. An analytical approach is utilized to optimize the lot size and planned backorder quantities based on the minimum average cost. Numerical examples are used to illustrate and compare the proposed model with previously developed models. The proposed model is considered more beneficial in comparison with the existing models as it incorporates imperfection, rework, inspection rate, and planned backorders.

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“…Montgomery et al (1973) were the first who developed an inventory model by general presumptions of the classic EOQ model under partial backlogging of demand. Nowadays, many researchers consider shortages in their models, especially with different forms of payments such as Tripathi (2012), Taleizadeh et al (2013), Lashgari et al (2016), Diabat et al (2017), and Cunha et al (2018). For these studies, all assumed the fraction of shortage backordered is constant over time.…”

Section: Introductionmentioning

confidence: 99%

An inventory model with credit, price and marketing dependent demand under permitted delayed payments and shortages: A signomial geometric programming approach

Rabbani¹,

Aliabadi²

2019

10.5267/j.uscm

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In this study, we incorporate trade credit policy into a joint marketing and pricing problem in which demand rate depends on the length of the credit period provided by the retailer for her customers, marketing expenditure, and selling price. The trade credit policy adopted here is a delayed payment policy in partial form in which the customers must pay a percent of the total purchasing cost at the time of placing an order and can pay the remaining amount later. Shortages are allowed and partially backordered. The main objective of this study is to determine the optimal credit period, marketing expenditure, selling price, and variables of inventory control simultaneously in order to maximize retailer's total profit. For solving the proposed problem, first an approximation method is applied to simplify the profit function and transform the problem into a constrained Signomial Geometric Programming (SGP) problem, then a global optimization approach is used for solving the model. Finally, a numerical example and sensitivity analysis of the important parameters are conducted to show the effectiveness of proposed approach.

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A lot sizing model with partial downstream delayed payment, partial upstream advance payment, and partial backordering for deteriorating items

Cited by 74 publications

References 57 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

A Single-Stage Manufacturing Model with Imperfect Items, Inspections, Rework, and Planned Backorders

An inventory model with credit, price and marketing dependent demand under permitted delayed payments and shortages: A signomial geometric programming approach

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