IDEAS home Printed from https://ideas.repec.org/a/spr/operea/v21y2021i3d10.1007_s12351-019-00501-4.html
   My bibliography  Save this article

Partial linked-to-order delayed payment and life time effects on decaying items ordering

Author

Listed:
  • Ata Allah Taleizadeh

    (University of Tehran)

  • Nadia Pourmohammad-Zia

    (Amirkabir University of Technology)

  • Ioannis Konstantaras

    (University of Macedonia)

Abstract

Trade-credit is an influential implementation in financial transactions. This paper proposes an inventory model for decaying items with lifetime under linked-to-order partial delay in payments. More precisely, the items are gradually deteriorating and also have a known maximum lifetime. The payment scheme is structured as follows: if the order quantity reaches a particular level, fully permissible trade credit is possible, otherwise the partial trade credit is offered. To the best of our knowledge, this is the first research incorporating the “Linked-to-order Trade Credit Financing” scheme for deteriorating items with lifetime. Selling price and purchasing costs are not considered equal and there is no need for the interest charged in stocks to be larger than the interest earned on investment. Theoretical results are developed to obtain the optimum solutions of the problem. The authenticity and pertinence of the model and solution procedure are illustrated through numerical results. Finally, sensitivity analysis and managerial insights are provided.

Suggested Citation

  • Ata Allah Taleizadeh & Nadia Pourmohammad-Zia & Ioannis Konstantaras, 2021. "Partial linked-to-order delayed payment and life time effects on decaying items ordering," Operational Research, Springer, vol. 21(3), pages 2077-2099, September.
    • Handle: RePEc:spr:operea:v:21:y:2021:i:3:d:10.1007_s12351-019-00501-4
    DOI: 10.1007/s12351-019-00501-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12351-019-00501-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12351-019-00501-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. Tiwari, Sunil & Cárdenas-Barrón, Leopoldo Eduardo & Goh, Mark & Shaikh, Ali Akbar, 2018. "Joint pricing and inventory model for deteriorating items with expiration dates and partial backlogging under two-level partial trade credits in supply chain," International Journal of Production Economics, Elsevier, vol. 200(C), pages 16-36.
    2. Liao, Jui-Jung, 2008. "An EOQ model with noninstantaneous receipt and exponentially deteriorating items under two-level trade credit," International Journal of Production Economics, Elsevier, vol. 113(2), pages 852-861, June.
    3. Yu-Chung Tsao, 2010. "Two-phase pricing and inventory management for deteriorating and fashion goods under trade credit," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 72(1), pages 107-127, August.
    4. Wu, Jiang & Ouyang, Liang-Yuh & Cárdenas-Barrón, Leopoldo Eduardo & Goyal, Suresh Kumar, 2014. "Optimal credit period and lot size for deteriorating items with expiration dates under two-level trade credit financing," European Journal of Operational Research, Elsevier, vol. 237(3), pages 898-908.
    5. Wu, Jiang & Chan, Ya-Lan, 2014. "Lot-sizing policies for deteriorating items with expiration dates and partial trade credit to credit-risk customers," International Journal of Production Economics, Elsevier, vol. 155(C), pages 292-301.
    6. Liao, Jui-Jung & Chung, Kun-Jen & Huang, Kuo-Nan, 2013. "A deterministic inventory model for deteriorating items with two warehouses and trade credit in a supply chain system," International Journal of Production Economics, Elsevier, vol. 146(2), pages 557-565.
    7. Ouyang, Liang-Yuh & Ho, Chia-Huei & Su, Chia-Hsien, 2008. "Optimal strategy for an integrated system with variable production rate when the freight rate and trade credit are both linked to the order quantity," International Journal of Production Economics, Elsevier, vol. 115(1), pages 151-162, September.
    8. B. C. Giri & S. Sharma, 2016. "Optimal ordering policy for an inventory system with linearly increasing demand and allowable shortages under two levels trade credit financing," Operational Research, Springer, vol. 16(1), pages 25-50, April.
    9. Wang, Wan-Chih & Teng, Jinn-Tsair & Lou, Kuo-Ren, 2014. "Seller’s optimal credit period and cycle time in a supply chain for deteriorating items with maximum lifetime," European Journal of Operational Research, Elsevier, vol. 232(2), pages 315-321.
    10. 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.
    11. Umakanta Mishra & Jacobo Tijerina-Aguilera & Sunil Tiwari & Leopoldo Eduardo Cárdenas-Barrón, 2018. "Retailer’s Joint Ordering, Pricing, and Preservation Technology Investment Policies for a Deteriorating Item under Permissible Delay in Payments," Mathematical Problems in Engineering, Hindawi, vol. 2018, pages 1-14, February.
    12. Roya Tat & Ata Allah Taleizadeh & Maryam Esmaeili, 2015. "Developing economic order quantity model for non-instantaneous deteriorating items in vendor-managed inventory (VMI) system," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(7), pages 1257-1268, May.
    13. Teng, Jinn-Tsair & Lou, Kuo-Ren & Wang, Lu, 2014. "Optimal trade credit and lot size policies in economic production quantity models with learning curve production costs," International Journal of Production Economics, Elsevier, vol. 155(C), pages 318-323.
    14. Chang, Chun-Tao, 2004. "An EOQ model with deteriorating items under inflation when supplier credits linked to order quantity," International Journal of Production Economics, Elsevier, vol. 88(3), pages 307-316, April.
    15. Ouyang, Liang-Yuh & Teng, Jinn-Tsair & Goyal, Suresh Kumar & Yang, Chih-Te, 2009. "An economic order quantity model for deteriorating items with partially permissible delay in payments linked to order quantity," European Journal of Operational Research, Elsevier, vol. 194(2), pages 418-431, April.
    16. 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.
    17. Huang, Yung-Fu, 2007. "Economic order quantity under conditionally permissible delay in payments," European Journal of Operational Research, Elsevier, vol. 176(2), pages 911-924, January.
    18. Dye, Chung-Yuan & Yang, Chih-Te, 2015. "Sustainable trade credit and replenishment decisions with credit-linked demand under carbon emission constraints," European Journal of Operational Research, Elsevier, vol. 244(1), pages 187-200.
    19. Shah, Nita H. & Cárdenas-Barrón, Leopoldo Eduardo, 2015. "Retailer’s decision for ordering and credit policies for deteriorating items when a supplier offers order-linked credit period or cash discount," Applied Mathematics and Computation, Elsevier, vol. 259(C), pages 569-578.
    20. Chung, Kun-Jen & Huang, Tien-Shou, 2007. "The optimal retailer's ordering policies for deteriorating items with limited storage capacity under trade credit financing," International Journal of Production Economics, Elsevier, vol. 106(1), pages 127-145, March.
    21. Nita Shah, 2015. "Retailer’s replenishment and credit policies for deteriorating inventory under credit period-dependent demand and bad-debt loss," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 23(1), pages 298-312, April.
    22. 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.
    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. Chandan Mahato & Gour Chandra Mahata, 2023. "Optimal ordering policy under order-size dependent trade credit and complete backlogging derived algebraically," OPSEARCH, Springer;Operational Research Society of India, vol. 60(1), pages 420-444, March.

    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. 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.
    2. Chandan Mahato & Gour Chandra Mahata, 2023. "Sustainable partial backordering inventory model under linked-to-order credit policy and all-units discount with capacity constraint and carbon emissions," Flexible Services and Manufacturing Journal, Springer, vol. 35(3), pages 896-944, September.
    3. Feng, Lin & Chan, Ya-Lan, 2019. "Joint pricing and production decisions for new products with learning curve effects under upstream and downstream trade credits," European Journal of Operational Research, Elsevier, vol. 272(3), pages 905-913.
    4. Mohsen Lashgari & Ata Allah Taleizadeh & Abbas Ahmadi, 2016. "Partial up-stream advanced payment and partial down-stream delayed payment in a three-level supply chain," Annals of Operations Research, Springer, vol. 238(1), pages 329-354, March.
    5. Pourmohammad Zia, Nadia & Taleizadeh, Ata Allah, 2015. "A lot-sizing model with backordering under hybrid linked-to-order multiple advance payments and delayed payment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 82(C), pages 19-37.
    6. 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.
    7. Yong-Wu Zhou & Bin Cao & Yuanguang Zhong & Yongzhong Wu, 2017. "Optimal advertising/ordering policy and finance mode selection for a capital-constrained retailer with stochastic demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(12), pages 1620-1632, December.
    8. Yu-Chung Tsao, 2015. "A piecewise nonlinear optimization for a production-inventory model under maintenance, variable setup costs, and trade credits," Annals of Operations Research, Springer, vol. 233(1), pages 465-481, October.
    9. 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.
    10. Wu, Jiang & Al-khateeb, Faisal B. & Teng, Jinn-Tsair & Cárdenas-Barrón, Leopoldo Eduardo, 2016. "Inventory models for deteriorating items with maximum lifetime under downstream partial trade credits to credit-risk customers by discounted cash-flow analysis," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 105-115.
    11. Khan, Md. Al-Amin & Shaikh, Ali Akbar & Cárdenas-Barrón, Leopoldo Eduardo, 2021. "An inventory model under linked-to-order hybrid partial advance payment, partial credit policy, all-units discount and partial backlogging with capacity constraint," Omega, Elsevier, vol. 103(C).
    12. Juanjuan Qin & Xiaojian Bai & Liangjie Xia, 2015. "Sustainable Trade Credit and Replenishment Policies under the Cap-And-Trade and Carbon Tax Regulations," Sustainability, MDPI, vol. 7(12), pages 1-22, December.
    13. Mohsen Lashgari & Ata Taleizadeh & Abbas Ahmadi, 2016. "Partial up-stream advanced payment and partial down-stream delayed payment in a three-level supply chain," Annals of Operations Research, Springer, vol. 238(1), pages 329-354, March.
    14. Fei Hu & Cheng-Chew Lim & Zudi Lu, 2015. "The retailer’s optimal decision on order quantity and credit periods under two-level trade credit policy," Journal of Global Optimization, Springer, vol. 62(4), pages 833-852, August.
    15. 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.
    16. Reza Maihami & Behrooz Karimi & Seyyed Mohammad Taghi Fatemi Ghomi, 2017. "Effect of two-echelon trade credit on pricing-inventory policy of non-instantaneous deteriorating products with probabilistic demand and deterioration functions," Annals of Operations Research, Springer, vol. 257(1), pages 237-273, October.
    17. Mu, Xiuqing & Kang, Kai & Zhang, Jing, 2022. "Dual-channel supply chain coordination considering credit sales competition," Applied Mathematics and Computation, Elsevier, vol. 434(C).
    18. Ping Ruan & Yung-Fu Huang & Ming-Wei Weng, 2022. "Impact of COVID-19 on Supply Chains: A Hybrid Trade Credit Policy," Mathematics, MDPI, vol. 10(8), pages 1-22, April.
    19. 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.
    20. Chung, Kun-Jen & Eduardo Cárdenas-Barrón, Leopoldo & Ting, Pin-Shou, 2014. "An inventory model with non-instantaneous receipt and exponentially deteriorating items for an integrated three layer supply chain system under two levels of trade credit," International Journal of Production Economics, Elsevier, vol. 155(C), pages 310-317.

    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:spr:operea:v:21:y:2021:i:3:d:10.1007_s12351-019-00501-4. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.