Abstract
This paper investigates a retailer’s optimal inventory cycle and the corresponding time of payment in fashion supply chains where a supplier allows the payment delay. Here according to the established model we first analyze the retailer's reaction, and then find out the retailer’s optimal inventory policy and time of payment to maximize its total profit. Our result shows that it is not always the best choice for retailers of fashion supply chains to choose the discount way to replenish stocks, but the retailer can decide the optimal credit period and inventory cycle. Moreover, numerical examples are provided to illustrate the model’s feasibility and rationality.
Highlights
With the fast development of economy, fashion industry develops rapidly in China and occupies an important position [1]
This paper investigates a retailer’s optimal inventory cycle and the corresponding time of payment in fashion supply chains where a supplier allows the payment delay
Our result shows that it is not always the best choice for retailers of fashion supply chains to choose the discount way to replenish stocks, but the retailer can decide the optimal credit period and inventory cycle
Summary
With the fast development of economy, fashion industry develops rapidly in China and occupies an important position [1]. Questions of how should suppliers decide the optimal credit period facing discount and payment time and what kind of corresponding inventory policy is the optimal for retailers under such conditions are seldom considered [4]. This paper mainly investigates credit period mechanism with discount issue between supplier and retailer in the fashion supply chain and their inventory optimization problems and makes proposals to solve the cooperation issue. To address these problems, the paper sets out to answer the following questions.
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