A review of trade credit literature: Opportunities for research in operations

Seifert, Daniel; Seifert, Ralf W.; Protopappa‐Sieke, Margarita

doi:10.1016/j.ejor.2013.03.016

Cited by 303 publications

(156 citation statements)

References 114 publications

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“…Zhou et al [26] studied an uncooperative order model for items with trade credit, inventory-dependent demand and limited displayed-shelf space. Reviews on the trade credit literature can be found in [20,27].…”

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confidence: 99%

A capital flow constrained lot sizing problem with trade credit

Chen

Zhang

2017

Scientia Iranica

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Abstract. This paper incorporates capital flow constraints and trade credit to lot sizing problems. Capital flow constraint is different from traditional capacity constraints: when a manufacturer begins to produce a certain number of products, its present capital should not be less than its total production costs of that period; otherwise, the manufacturer must decrease production quantity or suspend production, or it could delay payment using trade credit. Moreover, the capital of each period should also be greater than zero to avoid bankruptcy. We formulate a mathematical model for the single-item lot sizing problem. Based on dynamic programming, we approximate this mixed integer problem to a traveling salesman problem finding the longest route, divide the model into sub-linear problems without integer variables, and propose a dynamic programming algorithm with heuristic adjustment to solve it. The sub-linear problems can be easily solved by interior point algorithm. Our algorithm could obtain optimal solutions under certain situations. Numerical analysis shows our algorithm has small optimality deviation percentage under other situations and holds computation efficiency advantage compared with CPLEX 12.6.2. It also indicates capital flow constraints and the application of trade credit in lot sizing problems could affect optimal production decisions.

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Section: ()mentioning

confidence: 99%

A capital flow constrained lot sizing problem with trade credit

Chen

Zhang

2017

Scientia Iranica

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“…Trade credit financing is another common mode for a retailer to deal with a short-term budget shortage problem [16]. As an integrated part of a supply chain contract, trade credit can act as a risk-sharing mechanism among supply chain members [17].…”

Section: Interface Of Operations and Financing Decisionsmentioning

confidence: 99%

Low Carbon Distribution Channel Coordination with a Capital-Constrained Retailer

Wang

Cheng

Zhang

2018

Discrete Dynamics in Nature and Society

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Capital constraints exist in many supply chains. We examine a low carbon distribution channel that consists of a manufacturer and a retailer, in which the retailer is constrained by capital. The retailer can be financed by bank credit from a competitive bank market. A Stackelberg model is developed to analyze the integrated decision-making process of ordering, financing, and emission reduction. By comparing the decentralized and centralized channels, we obtain that the manufacturer's green technology investment should be linearly proportional to the retailer's order quantity in both channels. Thus, a large order quantity leads to increased efforts to reduce emissions. Results further show that the centralized channel in some cases has fewer emissions and can generate more profits for the whole supply chain compared with the decentralized channel. We therefore propose a revenue sharing contract with a function form to coordinate the distribution channel. When the government allocates appropriate quotas to the supply chain, high carbon price can benefit the environment and supply chain efficiency.

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“…International research (Seifert et al, 2013) suggests that trade receivables may reach as much as 40% of a company's sales with significant variations between countries and industries (Ng et al, 1999). The high share of accounts receivable in a firm's total assets causes companies to look for efficient ways of optimizing their trade credit policies in order to balance the sales stimulus with the costs of working capital finance.…”

Section: Introductionmentioning

confidence: 99%

Trade Finance in the Polish Corporate Sector: Balancing Growth and Financing Constraints

Mielcarz

Osiichuk

2017

Zeszyty Naukowe Uniwersytetu Szczecińskiego Finanse Rynki Finansowe Ubezpieczenia

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Abstract:The paper studies the determinants of trade credit in the Polish corporate sector. In addition to the readily understandable transaction motive, we investigate the influence of the company's liquidity, leverage and access to capital markets on its willingness to grant trade credit. Our findings suggest that firms actively adjust their trade receivables in order to avoid potential problems related to overtrading. We also find that more leveraged and more financially constrained companies are less likely to grant trade credit. Additionally, the paper studies the influence of the crisis settings on the dynamics of trade credit. We find that the outbreak of the crisis of 2008 caused companies to relax their trade credit policies which may speak in favour of the channelling theory of trade credit. The paper contributes to the on-going discussion on working capital management in the emerging economies.

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A review of trade credit literature: Opportunities for research in operations

Cited by 303 publications

References 114 publications

A capital flow constrained lot sizing problem with trade credit

A capital flow constrained lot sizing problem with trade credit

Low Carbon Distribution Channel Coordination with a Capital-Constrained Retailer

Trade Finance in the Polish Corporate Sector: Balancing Growth and Financing Constraints

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