Advance Payment Research Articles

Optimization of a Two-Warehouse EOQ Model for Non-Instantaneous Deteriorating Items with Polynomial Demand, Advance Payment, and Shortages

In this paper, a two-warehouse inventory model with polynomial time-dependent demand for noninstantaneous deteriorating items is taken into consideration. As advertisement plays a vital role in business, more advertisements are to be made by the retailer to increase demand in the competitive market. In order to meet the high demand, it is necessary to maintain two warehouses to store the goods in inventory: one owned warehouse with limited capacity and one rented warehouse with unlimited capacity. In order to increase sales, the retailer anticipates a discount from the manufacturer, and in turn, the retailer is equipped to pay a portion of the purchase price in advance. The model aims to optimize the overall profit by determining the appropriate order quantity and cycle length. Furthermore, numerical examples are provided for the validation of the proposed model.

Inventory Optimization Model with Quadratic Demand Pattern and Non-instantaneous Deterioration Rate with Mixed Cash and Advance Payment Scheme

Objectives: To develop a mathematical model for cost minimization by examining a scenario involving a seasonal product retail market, evaluating the outcome, and providing solutions to unanswered queries of existing models are the highlights of this present work. Methods: 1. Using dynamic differential equations with initial and boundary conditions, we mathematically model a retail market scenario for perishable commodities and determine the retailer's total cost. 2. We consider a quadratic function of time to precisely describe the maintenance cost and demand function. Also, a combination of cash and advance payment schemes is implemented in our model. 3. Our model was numerically formulated using a dataset deduced from earlier research. We have included a sensitivity analysis and a numerical example with a graphical depiction of the total cost function that highlights the most and least influential factors. 4. Based on the Hessian matrix condition and the calculus derivative approach, we developed an algorithm to calculate the optimal cost. Findings: This model provides retailers with insights for effective stock management while optimizing the cost of retailing perishable commodities with non-linear demand patterns. Sensitivity analysis showed that the two factors that have the biggest impact on retailers' overall costs are non-linear demand and holding cost parameters. The smaller optimal inventory cycle time and the large value of time at which a shortage happens raise the overall cost. Additionally, because of higher demand, the time-dependent deterioration rate has the least impact on overall cost. Additionally, a three-dimensional graph of cost minimization is offered to illustrate the convexity of total cost. Novelty: Implementation of Quadratic time-dependent demand and non-linear holding costs under a mixed cash advance payment structure, along with time-dependent deterioration and partial backlog shortages. Keywords: Quadratic Demand pattern, Non­instantaneous decay rate, Cash and Advance Payment scheme, Partial Backlog Shortages

Optimal decisions for green products with advanced payment scheme and selling price‐dependent demand under interval uncertainty

In the current competitive market, green products are becoming more and more in demand across all customer demographics due to environmental contamination. Consequently, this has a direct impact on the notable rise in product demand. Conversely, a product cannot be used or repurposed if its maximum useful life has already elapsed. Therefore, the product's maximum lifespan plays a crucial role in inventory management. Advance payment is a critical component of the supplier–retailer relationship for a seasonal product with high demand. By integrating these issues, an inventory model for perishable goods is created, wherein the demand for the good is impacted by both its selling price and its green level. The model also includes linearly time‐dependent holding costs. According to this model, product greenness has an increasing effect on per‐unit costs. Different numerical examples are studied for supporting this model. Optimality of the objective function is shown graphically as well as numerically with the help of MATHEMATICA software. Finally, a fruitful conclusion is reached after performing a sensitivity analysis and visually depicting the impact of changing various factors.

The Legislative and Jurisprudential Discrepancy Regarding the Advance Payment: A Comparative Analytical Study

The Legislative and Jurisprudential Discrepancy Regarding the Advance Payment: A Comparative Analytical Study

Investigating Advance Payment, Loan, and Mortgage Chapters in Bazraa Al-Hadrami’s Book Sabil Al-Rashad Sharh Kitab Al-Irshad (Guidance Path in Explanation of Right Guidance Book)

Investigating Advance Payment, Loan, and Mortgage Chapters in Bazraa Al-Hadrami’s Book Sabil Al-Rashad Sharh Kitab Al-Irshad (Guidance Path in Explanation of Right Guidance Book)

Buyer-Backed Purchase Order and Advance Payment Discount Financing Under Carbon Trade Revenue-Sharing Contract

The promotion of low-carbon production is a crucial aspect of sustainable development, and carbon trading has proven to be an effective means of achieving this goal. However, the limited capital hinders small and medium-sized enterprises (SMEs) from achieving low-carbon production. Thus, this paper examines a low-carbon supply chain comprising a financially constrained manufacturer and a well-funded retailer. We propose a game-theoretical model that addresses the financial constraints of the manufacturer through buyer-backed purchase order financing (BPOF) or advance payment discount (APD) with carbon trading revenue-sharing contracts. We investigate the determination of pricing and carbon emission reduction strategies by firms utilizing diverse financing models. We find that the total amount of carbon emission reduction increases with the manufacturer’s carbon trade revenue-sharing ratio. The financing rate of BPOF has a negative impact on the amount of carbon emission reduction, while the discount rate of APD will not affect either the carbon emission reduction or the revenue of the supply chain. Among the two financing strategies, APD is optimal for maximizing profit and promoting low-carbon development throughout the supply chain.

Financing Supplier Through Retailer’s Credit

This study examines two retailer-initiated pre-shipment financing programs to assist capital-constrained suppliers in securing external funds for production. The first program is retailer-sponsored financing (RSF), an emerging practice in developing economies. Under RSF, the retailer commits to sharing the loan repayment obligation with the supplier by agreeing to pay up to a specific portion of the supplier’s bank loan repayment. The second program is advance payment (AP), a common payment arrangement wherein the retailer pays a part of the wholesale amount upfront to support the supplier’s production costs. We analyze a supply chain comprising a supplier and retailer. The retailer must choose between offering RSF, AP, or neither. Without RSF or AP, the supplier must opt for bank-direct financing when it is short of funds and bear the full responsibility of repaying the loan principal and interest. Our findings reveal a divergence in supplier and retailer preferences. Specifically, the supplier favors RSF as it not only lowers the marginal production cost but also permits the supplier to charge a higher risk premium to the retailer compared to AP. Conversely, the retailer prefers AP primarily due to the latter reason. Our research underscores the significance of RSF as a distinct financing alternative, enabling retailers to aid a supplier segment that cannot rely solely on AP. RSF also proves to be advantageous for banks by expanding their supplier clientele and boosting their lending volume. Interestingly, the supplier’s and retailer’s bankruptcy risks tend to have opposite impacts on the value of RSF.

Impact of Carbon Emissions and Advance Payment on Optimal Decisions for Perishable Products via Parametric Approach of Interval

Under the heading of sustainability challenges, this study incorporates payment procedures and inventory selections. The article’s goal is to acquire insight into how the methods of payment affect perishable product inventory selections under the widely utilised carbon tax regime in view of policies to reduce emissions. Uncertainty arises as a natural consequence of the unpredictable behaviour of customers. Keeping these impacts in mind, an interval-valued inventory model is introduced, where all the related inventory parameters are considered interval-valued. In addition, the vendor offers an interval-valued discount rate to customers against advance payment. Due to the inventory parameters being chosen as interval-valued, the objective function is changed into an interval-valued form, and the corresponding differential equation is changed into an interval differential equation. To solve the interval-valued differential equation, a parametric approach to interval is introduced, and the corresponding interval-valued objective function is constructed. Interval order relations and the MATHEMATICA software are used to solve the objective function with interval values. To assess the validity of the proposed model, one numerical example is solved, and a sensitivity analysis of the ideal course of action is performed.

Inventory model for perishable items for interval-valued price dependent demand and advance payment policy with parametric approach via particle swarm optimization

ABSTRACT Advance payment for replenishment and the lifetime of an item are the most vital issues in the business sector. With the consideration of these issues, the formulation of a non-deterministic inventory model in the interval environment is of great importance. In this work, two different non-deterministic inventory models are formulated along with a variable holding cost, variable demand, and advertisement frequency under an advance payment policy in the interval environment. In the first inventory model, a no-shortage situation is discussed, whereas in the second model, a stock-out scenario is adopted by partially backordering during modelling. The modelling framework for both problems is accomplished based on interval differential equations. The interval optimization problems related to both models are obtained utilizing parametric approach and interval mathematics. Then, using interval order relations and different types of quantum particle swarm optimization, both interval optimization problems are solved. By means of two examples, the authentication of both models is examined and the benefits of the proposed approach are demonstrated. The impact of deviations of various parameters on optimality is studied graphically through the performance of sensitivity analyses, and the work is concluded by providing potential management insights and future scopes.

Association of the 2021 Child Tax Credit Advance Payments With Low Birth Weight in the US

Infants and pregnant people in the US fare worse on almost all health measures compared with those in peer nations. Families in the US are more likely to live in poverty and have a less generous social safety net, which has generated debate over the contribution of economic conditions to this disparity. To assess the association between temporary increases in income during pregnancy through the 2021 expanded Child Tax Credit (CTC) and birth outcomes. This cross-sectional study applied a comparison-population, interrupted time series design to data from US birth certificates (January 1, 2014, through December 31, 2021) to test whether the log odds of low birth weight (LBW) among monthly cohorts of births exposed to the CTC would coincide with a decreased incidence of LBW. All singleton live births to US residents aged 15 to 49 years with available data were included. Monthly birth cohorts exposed to the CTC were defined as those born to parous people during the CTC advance payment period from July through December 2021. The main outcome was the natural logarithm of the odds of LBW (<2500 g) among monthly birth cohorts. Among included births (n = 28 866 466), 61.2% were to parous people, the majority were to people aged 20 to 39 years (91.7%), and 6.5% were born LBW. The odds of LBW increased above expected values in 5 of the 6 months of the CTC payments (range of increases, 3.3%-5.4% across the 5 months). The outlier-adjusted odds of LBW increased, on average, by 4.2% (95% CI, 2.7%-5.7%) among the monthly birth cohorts exposed to the CTC. This study found that the odds of LBW among birth cohorts exposed to the CTC increased above expected values in 5 of the 6 months of the CTC advance payments. Additional research is needed to evaluate rival explanations for this increase in LBW among births exposed to the CTC payments.

A Fuzzy EOQ Inventory Model with Advance Payment and Various Fuzzy Numbers

A Fuzzy EOQ Inventory Model with Advance Payment and Various Fuzzy Numbers

Installment for advance payment and pricing decisions for an inventory system under power demand pattern and all-units discount

Advance payment method has emerged as an effective mechanism to control not only any company's cash flow but also order cancellations. To encourage customers to use the prepayment mechanism, companies offer a reduction opportunity on the products per unit purchase cost based on the purchased quantity. This work analyzes a retailer's joint installment for advance payment, pricing, and inventory policies to maximize profit under a combined order-sensitive advance payment and all-units discount system. To make the model more representative, the demand is incorporated as a multiplicative form of the effects of selling price as logit and time as power patterns, and shortages are also taken into account during the model's formulation. Theoretical expressions are derived to identify whether the inventory process is unprofitable under a joint link-to-order advance payment and all-units discount arrangement. Utilizing all the derived analytical expressions, an efficacious algorithm is built to attain the optimal installment frequency for prepayment, selling price, order quantity, and shortage amount for the inventory manager. To further study the effects of a combined link-to-order prepayment and all-units discount scheme, the outcomes of several numerical examples are documented. Finally, an exploration is carried out by varying the values of all demand parameters and inventory cost parameters under or in the absence of the combined link-to-order prepayment and all-units discount scheme to provide useful guidelines for the industry manager. A noteworthy and advantageous finding for the inventory management practitioner is that by adopting a linked-to-order prepayment and discount system, certain inventory strategies previously considered unprofitable in the absence of quantity-based advance payment and discount programs have the potential to become profitable. To minimize the cost related to prepayment amounts, the inventory manager should increase the optimal installment number when the installment cost is low but decrease it when the installment cost is high. Moreover, to mitigate the impact of high price sensitivity on demand, the practitioner ought to reduce the optimal selling price and decrease the order quantity per cycle, thereby maintaining customer demand.

Financing the Three-Tier Supply Chain: Advance Payment vs. Blockchain-Enabled Financing Mode

Supply chain finance has shown remarkable results in alleviating the financial constraints of small and medium-sized enterprises. However, most studies have concentrated on the two-tier supply chain while ignoring the financing issues of the deep-tier supply chain. This study introduced the blockchain-enabled financing mode now utilized in the manufacturing industry and constructed a three-tier agricultural supply chain considering the farmer’s financial constraints. The main contributions of this article are (1) presenting the blockchain-enabled financing mode in the three-tier agricultural supply chain and (2) investigating supply chain decision-making in the three-tier supply chain when the tier-2 supplier is financially constrained, comparing advance payment and the blockchain-enabled financing mode. Relevant parameter estimations were realized using the data of the last ten years, and numerical analyses were conducted. The results show that when the farmer’s bank’s financing capability exceeds the acquirer’s, the farmer is motivated to select the blockchain-enabled financing mode. However, a win-win situation among the three-tier supply chain is only achievable when the transmission-fee rate falls within a particular range. In addition, if government agencies wish to promote blockchain technology by subsidizing blockchain-enabled financing, they might support the farmer in obtaining a bank loan at a cheaper interest rate. All members of the supply chain would benefit from this.

BFO Theory with Variable Profit in Case of Advance Payments of Tax on Profit

The Brusov–Filatova–Orekhova (BFO) theory is generalized for the simultaneous account of variable company profit and advance tax on income payments. The generalized BFO formula for the WACC, has been derived. The dependence of WACC, discount rate, WACC–g (here g is growth rate), company capitalization, V, the equity cost, ke, on leverage L at various values of g, on debt cost, kd, and on age of the company, n, is studied. It is shown, that WACC, is no longer a discount rate. This role passes to WACC–g, which decreases with g, while the company's value increases with g. The tilt of curve k(L) growths with g. It is found that at the growth rate g &lt; g* the tilt of the curve ke(L) is negative. This changes significantly the company's dividend policy principles. WACC(L) as well as the discount rate, WACC–g, decrease with the increase of debt cost kd. V (L) at all values of kd increases with leverage L, as well V(L) increases with kd. This means that tax shield advantages the decrease of the cost of raising capital. Examining the main financial parameters of the company at the positive (g=0.2) and negative (g=–0.2) growth rates, we found a huge difference in their behavior. This allows you to explore companies with growing profits and companies with decreasing profits, as well investigate the financial state of the companies whose profits rise and fall in different periods.

A comparative investigation of a seller’s disaster payment period policy

Sellers can offer various payment schemes for buyers to boost demand, with the advance, cash, and credit payment policies being popular approaches. To provide further insight into the dynamics of these policies, we consider them in addition to a Disaster Grace Period payment option, which has become increasingly prevalent. The seller’s motivation for offering Advance, Cash, Credit or Disaster Grace Period (ACCD) payment options include the desire for a stronger relationship to the buyer, a smoother cash flow throughout the supply chain, and a potential increase in demand. In addition, the disaster grace period payment scheme can help in better navigating worldwide emergencies, such as pandemics, but also natural emergencies like severe storms, floods, tornadoes, and landslides, which have been happening with an increasing frequency over the last decades. However, the increase in the payment period increases the default/disaster risk, rendering a trade-off between risk and demand, making these crucial parameters in influencing the seller’s profit. Within this context, we aim to find the optimum replenishment cycle and payments period for a seller to increase their total profit. To do so, we perform numerical analysis to examine the impact of the demand coefficient, interest rate, default risk, disaster risk, and the disaster demand coefficient on profit. The results offer managerial insights on which payment option to choose in a particular setting to maximize profit. We for example find that sellers should offer a disaster grace period when the disaster demand increases and the risk of a disaster decreases.

Socio-economic Determinants Influence on NiliRavi Buffalo Farmers Choice of Milk Marketing Channels in Punjab

A total of 120 NiliRavi buffalo farmers from two districts of Punjab were selected for the study. The average production, consumption and marketed surplus of the milk are found to be higher for the Firozpur farmers in comparison with their counterpart. About 70 per cent of NiliRavi farmers preferred organised marketing channels to dispose surplus milk. The distance of dairy cooperatives (Govt. or Private) / dairy FPOs with regular &amp; assured market and support in availing loan for purchase of animals and inputs were main reasons for opting organised marketing channels. Advance payment for purchase of inputs and door step milk collection were important factors for choosing unorganised milk marketing channels. The results of binomial logistic regression revealed that Nili-Ravi farmer with younger age and large number of NiliRavi milch buffalo holdings preferred organised milk marketing channels to dispose surplus milk rather than unorganised channels. The organised milk marketing channels needs to be strengthened and promoted for regular and assured milk marketing and also use these channels as centre for the supply of NiliRavi superior germplasm to propagate their population.

Association of the Expiration of Child Tax Credit Advance Payments With Food Insufficiency in US Households

Advance Child Tax Credit (CTC) monthly payments administered to more than 35 million households with children in the US between July and December 2021 were associated with a substantial decrease in food insufficiency. These monthly payments expired in January 2022 after Congress failed to extend the policy, and the subsequent impact on food insufficiency is currently unknown. To assess whether the expiration of monthly CTC payments in January 2022 was associated with changes in food insufficiency in US households with children. This study used repeated cross-sectional, nationally representative data from multiple waves of the Household Pulse Survey, conducted by the US Census Bureau. Online data collection occurred from July 21, 2021, to July 11, 2022, and data analysis was performed in July 2022. The first missed advance CTC payment on January 15, 2022. The main outcome was unadjusted prevalence of household food insufficiency. Event study specification was used to estimate the association between the expiration of the CTC payments and household food insufficiency with the exposure of being in a household with children present. The sample (592 044 respondents, representing households with and without children, for a weighted population size of 123 350 770 individuals) was majority female (362 286 individuals [51.3%]) and non-Hispanic White (425 497 individuals [62.2%]), and a plurality of respondents (248 828 [48.3%]) were aged 25 to 44 years at the time of the survey. During the survey wave just before CTC expiration (reference wave, December 29, 2021, to January 10, 2022), unadjusted household food insufficiency was 12.7% among households with children. In late January and early February 2022, following the first missed CTC monthly payment, 13.6% of households with children reported food insufficiency, increasing to 16.0% by late June and early July 2022. The event study specification estimated a 3.2 percentage point increase (95% CI, 1.4-5.0 percentage points; P < .001) in food insufficiency by the most recent wave available after the first missed CTC payment (June 29 to July 11, 2022) among households with children compared with the reference wave, a 25% increase. The findings of this study suggest that there was an increase in food insufficiency among households with children after they stopped receiving monthly CTC payments. Given the well-documented associations between inability to afford food and poor health outcomes across the life span, Congress should consider swift action to reinstate this policy.

PAYMENT PROCEDURES UNDER FIDIC CONSTRUCTION CONTRACT

Payment provisions are of crucial importance to contractors. Owner’s payments are the life blood of the contractor's work. Contractors and owners must understand the provisions governing all types of payments for a construction project. This paper presented an analysis of payment provisions under the FIDIC Conditions of Contract for Construction (2017 Redbook). FIDIC conditions of contract for Construction are widely used worldwide, especially in the middle eastern countries. The analysis includes: 1) Advance payment; 2) Interim payments; and 3) Final payment. The analysis reveals that FIDIC conditions of contract recognizes the importance of timely fulfilling of payment obligations of the owner and includes precise procedures and serious consequences for delayed payments. The contractor can take serious actions in response to delay in certifying payments or delay in receiving the certified payments, including suspending the work and/or terminating the contract after giving written notice to the owner regarding the intended action. Such notices should follow the stipulated time limit for each action depending on the type of delay. The analysis presented in this paper should prove to be useful to owners and contractors alike and can contribute to reducing disputes between the contracting parties.

A Supply Chain Inventory Model for Deteriorating Products with Carbon Emission-Dependent Demand, Advanced Payment, Carbon Tax and Cap Policy

Emissions are a major contributor to climate change. Some nations are now concentrating their efforts on lowering carbon emissions. In many nations, carbon taxes and caps are the main tools that are used to attain this goal. The majority of the inventory retailer-supplier model assumed that the retailer’s order cost should be paid to the supplier at that time when he gets their order. Few suppliers can expect to receive the entire or a portion of the total cost in advance from retailers in this real-life situation, and others will offer prepayment in numerous equal installments. The advance payment offers the customer the lowest price for the order, but it has the largest carbon footprint. The advance payment has a great impact on carbon emissions and production. Therefore, this study looked at a carbon tax and cap supply chain inventory model for deterioration with carbon emission-dependent demand, and Three payment options: Preliminary, cash, and post-payment have been considered. The model was constructed by first assessing the overall cost of supply chain participants with carbon tax regulation. Finally, we illustrate numerical examples of the proposed approach and its outcomes. The implications of adjusting the various parameters on the optimal total cost are also graphically and tabularly discussed in depth. With the help of Mathematica version-12, a sensitivity analysis was also performed. Several management takeaways are also emphasized. These findings are incredibly managerial and enlightening for enterprises seeking profitability while still fulfilling their environmental duties, and this study is extremely useful for any country’s government policy.

Blockchain-Enabled Deep-Tier Supply Chain Finance

Problem definition: For many supply chains, deep-tier suppliers, due to their small size and lack of access to capital, are most vulnerable to disruptions. We study the use of advance payment (AP) as a financing instrument in a multitier supply chain to mitigate the supply disruption risk in a traditional system (with limited visibility) and a blockchain-enabled system (with perfect visibility). The main goal of this paper is to shed light on how blockchain adoption impacts agents’ operational and financial decisions as well as profit levels in a multitier supply chain. Academic/practical relevance: Traditionally, because of the limited visibility in the deep tiers, powerful downstream manufacturers’ financing schemes offered to their immediate upstream suppliers are not effective in instilling capital into the deep tiers. Advancements in blockchain technology improve the supply chain visibility and enable the manufacturer to better devise deep-tier financing to improve supply chain resilience. Methodology: We develop a three-tier supply chain model and take a game-theoretic approach to compare how blockchain-enabled deep-tier financing schemes affect a financially constrained supply chain’s optimal risk-mitigation and financial strategies. Results: We find that although improved visibility via blockchain adoption can help the manufacturer make informed supply chain financing decisions, whether it can benefit all supply chain members depends on the financing schemes in use. Blockchain-enabled delegate financing increases risk-mitigation investments and benefits all three tiers of the supply chain only when the tier 2 supplier is severely capital-constrained with the working capital below a threshold. Because delegate financing endows the intermediary tier 1 supplier with leverage over the manufacturer, the inefficiency inhibits an all-win outcome when the tier 2 supplier is not severely capital-constrained. Blockchain-enabled cross-tier direct financing exhibits a compelling performance as it always leads to win-win-win outcomes (and is thus ubiquitously implementable) regardless of the suppliers’ working capital profile. Managerial implications: Our insights help firms assess opportunities and challenges associated with enhancing supply chain visibility via blockchain adoption.