IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v127y2010i1p95-102.html
   My bibliography  Save this article

A delayed payment method in co-ordinating a single-vendor multi-buyer supply chain

Author

Listed:
  • Kin Chan, Chi
  • Lee, Y.C.E.
  • Goyal, S.K.

Abstract

In this paper, we consider a co-ordinated single-vendor multi-buyer supply chain model by synchronizing ordering and production cycles with delayed payments that are based on the buyers' order intervals. It can be shown that the synchronized cycles policy works better, in terms of total system costs, than independent optimization. While the vendor is benefited from the co-ordination by synchronized cycles, this research proposes a co-ordination mechanism that incorporates a delayed payment method which can guarantee that a buyer's total relevant cost of co-ordination will not be increased when compared with independent optimization. Most importantly, the vendor does not require any cost information from the buyers when applying this co-ordination mechanism.

Suggested Citation

  • Kin Chan, Chi & Lee, Y.C.E. & Goyal, S.K., 2010. "A delayed payment method in co-ordinating a single-vendor multi-buyer supply chain," International Journal of Production Economics, Elsevier, vol. 127(1), pages 95-102, September.
    • Handle: RePEc:eee:proeco:v:127:y:2010:i:1:p:95-102
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(10)00179-9
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jamal, A. M. M. & Sarker, Bhaba R. & Wang, Shaojun, 2000. "Optimal payment time for a retailer under permitted delay of payment by the wholesaler," International Journal of Production Economics, Elsevier, vol. 66(1), pages 59-66, June.
    2. Khouja, Moutaz & Goyal, Suresh, 2008. "A review of the joint replenishment problem literature: 1989-2005," European Journal of Operational Research, Elsevier, vol. 186(1), pages 1-16, April.
    3. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2008. "Coordination of a single-manufacturer/multi-buyer supply chain with credit option," International Journal of Production Economics, Elsevier, vol. 111(2), pages 676-685, February.
    4. Chun-Tao Chang & Jinn-Tsair Teng & Suresh Kumar Goyal, 2008. "Inventory Lot-Size Models Under Trade Credits: A Review," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 25(01), pages 89-112.
    5. Charles W. Haley & Robert C. Higgins, 1973. "Inventory Policy and Trade Credit Financing," Management Science, INFORMS, vol. 20(4-Part-I), pages 464-471, December.
    6. Chung, Kun-Jen & Huang, Yung-Fu, 2003. "The optimal cycle time for EPQ inventory model under permissible delay in payments," International Journal of Production Economics, Elsevier, vol. 84(3), pages 307-318, June.
    7. Abad, P. L. & Jaggi, C. K., 2003. "A joint approach for setting unit price and the length of the credit period for a seller when end demand is price sensitive," International Journal of Production Economics, Elsevier, vol. 83(2), pages 115-122, February.
    8. Chung, Kun-Jen & Goyal, Suresh Kumar & Huang, Yung-Fu, 2005. "The optimal inventory policies under permissible delay in payments depending on the ordering quantity," International Journal of Production Economics, Elsevier, vol. 95(2), pages 203-213, February.
    9. Chan, Chi Kin & Kingsman, Brian G., 2007. "Coordination in a single-vendor multi-buyer supply chain by synchronizing delivery and production cycles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(2), pages 90-111, March.
    10. Suresh Kumar Goyal & Chun-Tao Chang, 2008. "Economic Order Quantity Under Conditions Of A One-Time-Only Extended Permissible Delay Period In Payments," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 25(02), pages 267-277.
    11. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2006. "Buyer vendor coordination models in supply chain management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 1-15, November.
    12. Banerjee, Avijit & Burton, Jonathan S., 1994. "Coordinated vs. independent inventory replenishment policies for a vendor and multiple buyers," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 215-222, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Samuel Yousefi & Mustafa Jahangoshai Rezaee & Maghsud Solimanpur, 2021. "Supplier selection and order allocation using two-stage hybrid supply chain model and game-based order price," Operational Research, Springer, vol. 21(1), pages 553-588, March.
    2. Chan, Chi Kin & Lee, Y.C.E. & Campbell, J.F., 2013. "Environmental performance—Impacts of vendor–buyer coordination," International Journal of Production Economics, Elsevier, vol. 145(2), pages 683-695.
    3. Zhang, Qinhong & Dong, Ming & Luo, Jianwen & Segerstedt, Anders, 2014. "Supply chain coordination with trade credit and quantity discount incorporating default risk," International Journal of Production Economics, Elsevier, vol. 153(C), pages 352-360.
    4. Jen-Yen Lin & Ming-Jong Yao, 2020. "The joint replenishment problem with trade credits," Journal of Global Optimization, Springer, vol. 76(2), pages 347-382, February.
    5. Lee, Y.C.E. & Chan, Chi Kin & Langevin, A. & Lee, H.W.J., 2016. "Integrated inventory-transportation model by synchronizing delivery and production cycles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 68-89.
    6. Abhishek Chakraborty, 2021. "A surcharge pricing policy for supply chain coordination under the just-in-time (JIT) environment in the presence of backordering," OPSEARCH, Springer;Operational Research Society of India, vol. 58(4), pages 1049-1076, December.
    7. Glock, Christoph H. & Kim, Taebok, 2015. "The effect of forward integration on a single-vendor–multi-retailer supply chain under retailer competition," International Journal of Production Economics, Elsevier, vol. 164(C), pages 179-192.
    8. Ata Allah Taleizadeh & Shayan Tavakoli & Luis Augusto San-José, 2018. "A lot sizing model with advance payment and planned backordering," Annals of Operations Research, Springer, vol. 271(2), pages 1001-1022, December.
    9. Jonrinaldi, & Zhang, D.Z., 2013. "An integrated production and inventory model for a whole manufacturing supply chain involving reverse logistics with finite horizon period," Omega, Elsevier, vol. 41(3), pages 598-620.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shi, Xiaojun & Zhang, Shunming, 2010. "An incentive-compatible solution for trade credit term incorporating default risk," European Journal of Operational Research, Elsevier, vol. 206(1), pages 178-196, October.
    2. Hardik Soni & Nita H. Shah, 2008. "Optimal Ordering and Trade Credit Policy for EOQ Model," Indus Journal of Management & Social Science (IJMSS), Department of Business Administration, vol. 2(1), pages 66-76, June.
    3. Seifert, Daniel & Seifert, Ralf W. & Protopappa-Sieke, Margarita, 2013. "A review of trade credit literature: Opportunities for research in operations," European Journal of Operational Research, Elsevier, vol. 231(2), pages 245-256.
    4. R. Sundara rajan & R. Uthayakumar, 2017. "Comprehensive solution procedure for optimizing replenishment policies of instantaneous deteriorating items with stock-dependent demand under partial trade credit linked to order quantity," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 1343-1373, November.
    5. Chan, Chi Kin & Man, Nora & Fang, Fei & Campbell, J.F., 2020. "Supply chain coordination with reverse logistics: A vendor/recycler-buyer synchronized cycles model," Omega, Elsevier, vol. 95(C).
    6. Lee, Y.C.E. & Chan, Chi Kin & Langevin, A. & Lee, H.W.J., 2016. "Integrated inventory-transportation model by synchronizing delivery and production cycles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 68-89.
    7. Xu, Xinhan & Chen, Xiangfeng & Jia, Fu & Brown, Steve & Gong, Yu & Xu, Yifan, 2018. "Supply chain finance: A systematic literature review and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 204(C), pages 160-173.
    8. Chan, Chi Kin & Lee, Y.C.E., 2012. "A co-ordination model combining incentive scheme and co-ordination policy for a single-vendor–multi-buyer supply chain," International Journal of Production Economics, Elsevier, vol. 135(1), pages 136-143.
    9. Beatriz Abdul-Jalbar & Roberto Dorta-Guerra & José M. Gutiérrez & Joaquín Sicilia, 2021. "Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives," Mathematics, MDPI, vol. 9(15), pages 1-25, July.
    10. Bylka, StanisLaw, 2011. "Non-cooperative strategies for production and shipment lot sizing in one vendor-multi-buyer system," International Journal of Production Economics, Elsevier, vol. 131(1), pages 372-382, May.
    11. Chan, Chi Kin & Lee, Y.C.E. & Campbell, J.F., 2013. "Environmental performance—Impacts of vendor–buyer coordination," International Journal of Production Economics, Elsevier, vol. 145(2), pages 683-695.
    12. Dharmendra Yadav & S.R. Singh & Rachna Kumari, 2015. "Retailer's optimal policy under inflation in fuzzy environment with trade credit," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(4), pages 754-762, March.
    13. Esmaeili, M. & Aryanezhad, Mir-Bahador & Zeephongsekul, P., 2009. "A game theory approach in seller-buyer supply chain," European Journal of Operational Research, Elsevier, vol. 195(2), pages 442-448, June.
    14. Hariga, Moncer & Hassini, Elkafi & Ben-Daya, Mohamed, 2014. "A note on generalized single-vendor multi-buyer integrated inventory supply chain models with better synchronization," International Journal of Production Economics, Elsevier, vol. 154(C), pages 313-316.
    15. Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi & Nematollahi, Mohammadreza & Goh, Mark & Ignatius, Joshua, 2018. "Bi-level credit period coordination for periodic review inventory system with price-credit dependent demand under time value of money," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 270-291.
    16. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2008. "Coordination of a single-manufacturer/multi-buyer supply chain with credit option," International Journal of Production Economics, Elsevier, vol. 111(2), pages 676-685, February.
    17. Pattnaik, Debidutta & Hassan, Mohammad Kabir & Kumar, Satish & Paul, Justin, 2020. "Trade credit research before and after the global financial crisis of 2008 – A bibliometric overview," Research in International Business and Finance, Elsevier, vol. 54(C).
    18. Nita Shah & Monika Naik, 2019. "Coordinated production, ordering, shipment and pricing model for supplier-retailer inventory system under trade credit," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 29(2), pages 55-76.
    19. Huang, Yung-Fu & Hsu, Kuang-Hua, 2008. "An EOQ model under retailer partial trade credit policy in supply chain," International Journal of Production Economics, Elsevier, vol. 112(2), pages 655-664, April.
    20. Ho, Chia-Huei & Ouyang, Liang-Yuh & Su, Chia-Hsien, 2008. "Optimal pricing, shipment and payment policy for an integrated supplier-buyer inventory model with two-part trade credit," European Journal of Operational Research, Elsevier, vol. 187(2), pages 496-510, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:127:y:2010:i:1:p:95-102. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.