Abstract
Retailer’s inventory system in a two-level trade credit financing with selling price discount and partial order cancelations
Highlights
In today’s business era, retailers have the dominant power of controlling or affecting another member’s decision in a supply chain
This paper investigates retailer inventory system in which customers are partially canceling their orders during advance sales period
Thangam and Uthayakumar (2009) developed an economic production quantity (EPQ) model for perishable items under twolevel trade credit policy when demand depends on selling price and credit period
Summary
In today’s business era, retailers have the dominant power of controlling or affecting another member’s decision in a supply chain. A retailer has the ability to offer an effective promotional effect such as price discount, credit period etc. There are situations in which the retailer announces price discount offers to the customers who can commit their orders before the selling period. Due to the booming in IT, customers can commit their orders prior to selling period and the estimation error in demand can be reduced. In dairy product manufacturing scheme prior to selling season, the retailer offers price discount to the customers who register their orders via email or phone call etc. This paper investigates retailer inventory system in which customers are partially canceling their orders during advance sales period. The customers commit their orders before the selling period. Numerical examples are given to illustrate the solution process and sensitivity analyses are performed for various inventory key parameters
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