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Risk management for barter exchange policy under retail industry

Author

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  • Mishra, Mowmita
  • Ghosh, Santanu Kumar
  • Sarkar, Biswajit
  • Sarkar, Mitali
  • Hota, Soumya Kanti

Abstract

Nowadays, barter exchange has become growingly popular in the national and global industries as an alternative to excessive inventory transfers. Many companies exchange their surplus products on barter platforms for products they need without using money. In a traditional supply chain, the retailer holds unsold products that hinder the supply chain's profitability from reaching its maximum level. This paper solves this issue by proposing a stochastic model of two players (single manufacturer, single retailer) with trade-credit (delayed payment) and barter exchange policy under a supply chain management. In this work, to entice the retailer and increase sales, the manufacturer grants a credit payment facility to the retailer on the items ordered for a specified period, and the manufacturer does not charge any interest on the outstanding amount during this credit period. The concept of a credit period raises the possibility of default risk. In this case, some interest is charged. Several investments are made here to diminish setup and ordering costs and improve the product quality of the system. This work focuses on the flexible production to manage the demand uncertainty and the marginal reduction technology to lessen carbon emissions that occur during the production and inventory holding. In contrast, a retailer can exchange unsold items in the barter market for its required products, which is extensively discussed in this study. Finally, the maximum profit is assessed in terms of credit period, investments, quality improvement, and production rate. The result numerically and graphically proves a huge impact of the barter platform for any business industry on overstock transfers, conserving cash, managing unpredictable demand, and reaching the maximum profit. Moreover, the significant finding is observed in the proposed work that the idea of the flexible production, barter exchange policy, and several investments increase the system profit up to 50.55%.

Suggested Citation

  • Mishra, Mowmita & Ghosh, Santanu Kumar & Sarkar, Biswajit & Sarkar, Mitali & Hota, Soumya Kanti, 2024. "Risk management for barter exchange policy under retail industry," Journal of Retailing and Consumer Services, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:joreco:v:77:y:2024:i:c:s0969698923003740
    DOI: 10.1016/j.jretconser.2023.103623
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