The optimal pricing and ordering policy for an integrated inventory model when trade credit linked to order quantity |
| |
Authors: | Hung-Chi Chang Chia-Huei Ho Liang-Yuh Ouyang Chia-Hsien Su |
| |
Affiliation: | 1. Department of Logistics Engineering and Management, National Taichung Institute of Technology, Taichung 400, Taiwan;2. Graduate School of Management, Ming Chuan University, 250 Zhong Shan N. Road, Taipei 111, Taiwan;3. Department of Management Sciences and Decision Making, Tamkang University, Tamsui, Taipei 251, Taiwan;4. Department of Business Administration, Tungnan University, ShenKeng, Taipei 222, Taiwan |
| |
Abstract: | In traditional inventory models, it is implicitly assumed that the buyer must pay for the purchased items as soon as they have been received. However, in many practical situations, the vendor is willing to provide the buyer with a permissible delay period when the buyer’s order quantity exceeds a given threshold. Therefore, to incorporate the concept of vendor–buyer integration and order-size-dependent trade credit, we present a stylized model to determine the optimal strategy for an integrated vendor–buyer inventory system under the condition of trade credit linked to the order quantity, where the demand rate is considered to be a decreasing function of the retail price. By analyzing the total channel profit function, we developed some useful results to characterize the optimal solution and provide an iterative algorithm to find the retail price, buyer’s order quantity, and the numbers of shipment per production run from the vendor to the buyer. Numerical examples and sensitivity analysis are given to illustrate the theoretical results, and some managerial insights are also obtained. |
| |
Keywords: | Integrated inventory model Trade credit Order-size-dependent delay Pricing |
本文献已被 ScienceDirect 等数据库收录! |
|