A study of inventory problem with appreciation period and trade credit under advance sales

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Title:	A study of inventory problem with appreciation period and trade credit under advance sales
Authors:	Cheng, Mei-Chuan;Ouyang, Liang-yuh
Contributors:	淡江大學管理科學學系
Keywords:	Inventory;Trade credit;Advance sales;Appreciation period;Finance
Date:	2013-05
Issue Date:	2013-10-21 15:59:34 (UTC+8)
Publisher:	新北市：淡江大學
Abstract:	Today, competition is not only rife but growing more intense every year. Due to the effects of globalization, advances in technology and information, successful companies have to keep growing. In order to sustain competitive advantage and increase market share, retailers provide better and better service. In the marketplace, offering appreciation period has become a commonly adopted method to retailers. During the appreciation period, customers can make a request to return products for any kind of reason. Packaging errors and product defects are some of the common reasons that customers make a request to return products. To attract more customers, it is a common practice for retailers to provide advance sales. Advance sales provide numerous benefits for companies, including gaining additional discriminative customers and increased profit due to interest earned from payments received from committed customers prior to the start of the regular selling period. In addition, trade credit is a common payment behavior in business to business (B2B) and business to customer (B2C) transactions. The supplier usually provides the retailer a trade credit to attract more customers who consider it to be a type of price reduction. Therefore, in this article, we establish an inventory model for a retailer who simultaneously receives trade credit from its supplier, and offers advance sales and appreciation period to its customers. Finally, numerical examples are given to illustrate the solution procedure and a sensitivity analysis is performed to investigate the effect of changes of some main parameter values on the optimal solution.
Relation:	The 2013 International Conference in Management Sciences and Decision Making=2013年管理科學與經營決策國際學術研討會
Appears in Collections:	[Department of Management Sciences] Proceeding

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