Optimal trade credit and lot size policies in economic production quantity models with learning curve production costs

Teng, Jinn‐Tsair; Lou, Kuo-Ren; Wang, Lu

doi:10.1016/j.ijpe.2013.10.012

Cited by 72 publications

(38 citation statements)

References 37 publications

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“…Our work is closely related to the growing research streams on coordinated trade credit financing and inventory management subject to environmental constraints. Compare with previous works such as Teng and Lou (2012), Lou and Wang (2012), Wu and Chan (2014), Wang et al (2014), and Teng et al (2013), Chern et al (2013) and Chern et al (2014), we show the model can be further extended to the case with generalized demand and default risk rates, and allow for partial backlogging. Hence, the present model helps managers to take the carbon emissions constrains into consideration to make better trade credit and inventory replenishment decisions.…”

Section: Discussionmentioning

confidence: 59%

“…In Example 1, we adopt the exponential demand and default rates used in Teng and Lou (2012), Lou and Wang (2012), Teng et al (2013), Chern et al (2013), Wu and Chan (2014), Wang et al (2014) and Chern et al (2014). Example 2 presents a linear demand rate and a truncated logistic default rate.…”

Section: Numerical Examplesmentioning

confidence: 99%

“…Meanwhile, Lou and Wang (2012) extended the classical EOQ model by introducing the credit-linked demand and default risks. Based on the results of Teng and Lou (2012) and Lou and Wang (2012), numerous research works, such as Wu and Chan (2014), Wang, Teng, and Lou (2014), Wu, Ouyang, Cárdenas-Barrón, and Goyal (2014) and Teng, Lou, and Wang (2013), constructed and analyzed inventory models for deteriorating items with expiration dates under different environmental scenarios and focused on how to determine the optimal credit period for the retailer. Chern, Pan, Teng, Chan, and Chen (2013) and Chern et al (2014) discussed the vendor-buyer inventory-production models with trade credit risk in a supply chain.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints

Dye

Yang

2015

European Journal of Operational Research

143

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Section: Discussionmentioning

confidence: 59%

Section: Numerical Examplesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints

Dye

Yang

2015

European Journal of Operational Research

143

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“…Lou and Wang [12] study optimal trade credit and order quantity by considering trade credit with a positive correlation of market sales, but are negatively correlated with credit risk. Teng et al [19] discuss the optimal trade credit and lot size policies considering the demand and default risk sensitive to the credit period with learning curve production costs. Wu et al [21] explore optimal credit period and lot size by considering demand dependence on delayed payment time with default risk for deteriorating items with expiration dates.…”

Section: Introductionmentioning

confidence: 99%

Retailer’s Optimal Credit Period and Cycle Time in a Supply Chain for Deteriorating Items With Stock and Credit-Sensitive Demand Incorporating Default Risk

Mahata¹,

De²

2017

Int. J. Appl. Math. Mach. Learning

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In this paper, we propose an economic order quantity model of a retailer for deteriorating items with default risk consideration. The demand is assumed as a function of inventory level and credit period. The objective is to find the retailer's optimal credit period and cycle time while maximizing profit per unit time. For any given credit period, we first prove that the optimal cycle time not only exists, but is also unique in some conditions. Second, we show how the optimal credit period for any given replenishment cycle can be decided.Furthermore, we use the Lingo to obtain global maximum solutions to the optimal cycle time and the optimal credit period for the proposed model. Sensitivity analysis is conducted to provide some managerial insights.

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“…Enda et al [11] presented a generic solution to the sensitive issue of PCI Compliance. Teng et al [12] proposed an EPQ model from the seller's prospective to determine his/her optimal trade credit period, and in his paper production cost declined and obeyed a learning curve phenomenon. However, the above inventory models did not consider the effects of the time value of money.…”

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confidence: 99%

Optimal Economic Ordering Policy with Trade Credit and Discount Cash-Flow Approach

Jiaqin¹,

Jiangtao

Min

2015

TELKOMNIKA

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Keywords: two-level trade credit, deteriorating items, order quantity dependent credit, discount cash-flow, EOQCopyright © 2015 Universitas Ahmad Dahlan. All rights reserved. IntroductionIn the traditional economic order quantity models assumed the purchaser must pay for the items as soon as the items received. However, in real markets, to stimulate retailer's ordering qualities the supplier allows a certain fixed permissible delay in payment to settle the amount. Similarly, a retailer may offer his/her customers a permissible delay period to settle the outstanding balance when he/she received a trade credit by the supplier, which is a two-level trade credit. Huang [1] was the first to explore an EOQ model under the two-level trade credit. Kreng and Tan [2] and Ouyang et al [3] proposed to determine the optimal replenishment decisions if the purchasers order quantity is greater than or equal to a predetermined quantity. Teng et al [4] extended the constant demand to a linear non-decreasing demand function of time and incorporate supplier offers a permissible delay linked to order quantity under two levels of trade credit. Teng et al [5] established an EOQ with trade credit financing for a linear nondecreasing demand function of time. Paulus [6] shed light on how search strategy can be used to gain the maximum benefit of information search activities. Feng et al [7] investigated the retailer's optimal cycle time and optimal payment time under the supplier's cash discount and trade credit policy within the EPQ framework. Wang et al [8] established an economic order quantity model for deteriorating items with maximum lifetime and credit period increasing demand and default risk. Liao [9] developed an inventory model by considering two levels of trade credit, limited storage capacity. Wu et al [10] discussed an economic order quantity model under two levels trade credit, and assumed deteriorating items have their expiration dates. Enda et al [11] presented a generic solution to the sensitive issue of PCI Compliance. Teng et al [12] proposed an EPQ model from the seller's prospective to determine his/her optimal trade credit period, and in his paper production cost declined and obeyed a learning curve phenomenon. However, the above inventory models did not consider the effects of the time value of money. In fact, as the value of money changes with time, it is necessary to take the effect of the time value of money on the inventory policy into consideration. Chang et al [13] investigated the DCF approach to establish an inventory model for deteriorating items with trade credit based on the order quantity. Chung and Liao [14] adopted the DCF approach to discuss the effect of trade credit depending on the ordering quantity. Liao and Huang [15] extended the inventory model to

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Optimal trade credit and lot size policies in economic production quantity models with learning curve production costs

Cited by 72 publications

References 37 publications

Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints

Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints

Retailer’s Optimal Credit Period and Cycle Time in a Supply Chain for Deteriorating Items With Stock and Credit-Sensitive Demand Incorporating Default Risk

Optimal Economic Ordering Policy with Trade Credit and Discount Cash-Flow Approach

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