Seller’s optimal credit period and cycle time in a supply chain for deteriorating  items with maximum lifetime

doi:10.1016/j.ejor.2013.06.027

淡江大學機構典藏 > 商管學院 > 管理科學學系暨研究所 > 期刊論文 > Item 987654321/104347

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Title:	Seller’s optimal credit period and cycle time in a supply chain for deteriorating items with maximum lifetime
Authors:	Wang, Wan-Chih;Teng, Jinn-Tsair;Lou, Kuo-Ren
Keywords:	Supply chain management;Inventory;Deteriorating items;Maximum lifetime;Trade credit
Date:	2014-01-16
Issue Date:	2016-01-06 10:56:23 (UTC+8)
Abstract:	Due to evaporation, obsolescence, spoilage, etc., some products (e.g., fruits, vegetables, pharmaceuticals, volatile liquids, and others) not only deteriorate continuously but also have their expiration dates. To attract new buyers and increase sales, a seller frequently offers its buyers a trade credit period to settle the purchase amount. There is no interest charge to a buyer if the purchasing amount is paid within the credit period, and vice versa. On the other hand, granting a credit period from a seller to its buyers increases default risk. In this paper, we propose an economic order quantity model for a seller by incorporating the following relevant facts: (1) deteriorating products not only deteriorate continuously but also have their maximum lifetime, and (2) credit period increases not only demand but also default risk. We then characterize the seller’s optimal credit period and cycle time. Furthermore, we discuss a special case for non-deteriorating items. Finally, we run several numerical examples to illustrate the problem and provide some managerial insights.
Relation:	European Journal of Operational Research 232(2), pp.315-321
DOI:	10.1016/j.ejor.2013.06.027
Appears in Collections:	[管理科學學系暨研究所] 期刊論文

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