In reality, the supplier frequently provides its retailers a permissible delay in payments in order to increase its sales. Meanwhile, the retailer often offers its customers an "advance booking discount" (ABD) program, which provides numerous benefits such as gaining additional discriminative customers, increasing profit from interest earned by the pre-committed and pre-paid money, and others. In this article, we establish an inventory model for a retailer who simultaneously receives a permissible delay in payments from its supplier, and offers an ABD program to its customers. We first establish a proper model, and then provide an easy-to-use method to obtain the optimal order quantity and prior-sales discount rate for the retailer to achieve its maximum total profit per unit time. Finally, several numerical examples are given to illustrate the solution procedure.
Relation:
2007 年管理科學與經營決策國際學術研討會論文集=Proceedings of the 2007 International Conference in Management Sciences and Decision Making, pp.275-300
