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

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  • 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
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    References listed on IDEAS

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    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.
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    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.
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    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.

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