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Inventory and credit decisions for deteriorating items with displayed stock dependent demand in two-echelon supply chain using Stackelberg and Nash equilibrium solution

Author

Listed:
  • Chandra K. Jaggi

    (University of Delhi)

  • Mamta Gupta

    (University of Delhi)

  • Amrina Kausar

    (University of Delhi)

  • Sunil Tiwari

    (University of Delhi
    National University of Singapore)

Abstract

With the prevalence of network technologies, the world is shrinking and it is observed that the decision policies of the players of the supply chain go hand in hand. Thus the optimal replenishment decisions of retailers cannot be taken in isolation and need to be integrated with that of the supplier. This research work establishes a supplier-retailer supply chain in which demand for the products is displayed stock dependent. Nowadays, trade credit is also seen as prime source of short term financing, thus the retailer takes the benefit of permissible delay in payments from the supplier. The objective of the proposed model is to obtain the optimal decisions of the supply chain under three different policies- centralized, Supplier-led Stackelberg policy and Nash equilibrium solution. In this study, the influence of trade credit offered by the supplier, replenishment decisions and integration among the players of supply chain through different centralized and decentralized policies is analyzed for deteriorating items where retailer faces displayed stock dependent demand with two storage facilities. The model is best suitable for the emerging retail markets or supermarkets with limited shelf space displaying consumable items such as grocery, consumer goods, etc. The results have been validated with the help of a numerical example. Sensitivity analysis has also been performed to study the effect of various parameters on the optimal solution.

Suggested Citation

  • Chandra K. Jaggi & Mamta Gupta & Amrina Kausar & Sunil Tiwari, 2019. "Inventory and credit decisions for deteriorating items with displayed stock dependent demand in two-echelon supply chain using Stackelberg and Nash equilibrium solution," Annals of Operations Research, Springer, vol. 274(1), pages 309-329, March.
    • Handle: RePEc:spr:annopr:v:274:y:2019:i:1:d:10.1007_s10479-018-2925-9
    DOI: 10.1007/s10479-018-2925-9
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    Cited by:

    1. Lin Feng & Konstantina Skouri & Wan-Chih Wang & Jinn-Tsair Teng, 2022. "Optimal selling price, replenishment cycle and payment time among advance, cash, and credit payments from the seller’s perspective," Annals of Operations Research, Springer, vol. 315(2), pages 791-812, August.
    2. Yue Xie & Allen H. Tai & Wai-Ki Ching & Yong-Hong Kuo & Na Song, 2021. "Joint inspection and inventory control for deteriorating items with time-dependent demand and deteriorating rate," Annals of Operations Research, Springer, vol. 300(1), pages 225-265, May.
    3. Mukunda Choudhury & Sujit Kumar De & Gour Chandra Mahata, 2023. "A pollution-sensitive multistage production-inventory model for deteriorating items considering expiration date under Stackelberg game approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11847-11884, October.
    4. Kun-Jen Chung & Jui-Jung Liao & Shy-Der Lin & Sheng-Tu Chuang & Hari Mohan Srivastava, 2019. "The Inventory Model for Deteriorating Items under Conditions Involving Cash Discount and Trade Credit," Mathematics, MDPI, vol. 7(7), pages 1-20, July.
    5. Mamta Gupta & Sunil Tiwari & Chandra K. Jaggi, 2020. "Retailer’s ordering policies for time-varying deteriorating items with partial backlogging and permissible delay in payments in a two-warehouse environment," Annals of Operations Research, Springer, vol. 295(1), pages 139-161, December.
    6. Yunlong Yu & Tiaojun Xiao & Zhangwei Feng, 2020. "Price and cold-chain service decisions versus integration in a fresh agri-product supply chain with competing retailers," Annals of Operations Research, Springer, vol. 287(1), pages 465-493, April.
    7. Ajoy Hatibaruah & Sumit Saha, 2023. "An inventory model for two-parameter Weibull distributed ameliorating and deteriorating items with stock and advertisement frequency dependent demand under trade credit and preservation technology," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 951-1002, June.
    8. Yonit Barron, 2022. "A probabilistic approach to the stochastic fluid cash management balance problem," Annals of Operations Research, Springer, vol. 312(2), pages 607-645, May.
    9. Ruihai Li & Jinn-Tsair Teng & Chun-Tao Chang, 2021. "Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age," Annals of Operations Research, Springer, vol. 307(1), pages 303-328, December.
    10. Ruihai Li & Jinn-Tsair Teng & Yingfei Zheng, 2019. "Optimal credit term, order quantity and selling price for perishable products when demand depends on selling price, expiration date, and credit period," Annals of Operations Research, Springer, vol. 280(1), pages 377-405, September.
    11. Ata Allah Taleizadeh & Sara Tavassoli & Arijit Bhattacharya, 2020. "Inventory ordering policies for mixed sale of products under inspection policy, multiple prepayment, partial trade credit, payments linked to order quantity and full backordering," Annals of Operations Research, Springer, vol. 287(1), pages 403-437, April.

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