A STUDY ON THE COORDINATION OF THE TWO-ECHELON SUPPLY CHAIN USING CREDIT AND QUANTITY DISCOUNT OPTIONS

In this paper we study the coordination of the two-echelon supply chain using credit and quantity discount options. We determine the retail price, order quantity for the buyer, and the setup frequency, credit period for the supplier in four different scenarios (with or without coordination and with or without credit option). And we suggest a policy that incorporates both quantity discount and credit option, which will benefit both parties and maximize the total supply chain profit.

[1]  D. Mehta,et al.  The Formulation of Credit Policy Models , 1968 .

[2]  Suresh Kumar Goyal,et al.  An integrated inventory model for a single supplier-single customer problem , 1977 .

[3]  S. Goyal.  Economic Order Quantity under Conditions of Permissible Delay in Payments , 1985 .

[4]  M. J. Rosenblatt,et al.  A generalized quantity discount pricing model to increase supplier's profits , 1986 .

[5]  A. Banerjee.  A JOINT ECONOMIC-LOT-SIZE MODEL FOR PURCHASER AND VENDOR , 1986 .

[6]  S. Goyal.  “A JOINT ECONOMIC‐LOT‐SIZE MODEL FOR PURCHASER AND VENDOR”: A COMMENT* , 1988 .

[7]  Abraham Mehrez,et al.  Economic Production Lot Size Model with Variable Production Rate and Imperfect Quality , 1994 .

[8]  M. J. Rosenblatt,et al.  Coordinating a three-level supply chain with quantity discounts , 2001 .

[9]  Jason Chao-Hsien Pan,et al.  A study of an integrated inventory with controllable lead time , 2002 .

[10]  Hark Hwang,et al.  Optimal pricing and ordering policies for retailers under order-size-dependent delay in payments , 2003, Comput. Oper. Res..

[11]  C. Jaggi,et al.  A joint approach for setting unit price and the length of the credit period for a seller when end demand is price sensitive , 2003 .

[12]  Tsung-Hui Chen,et al.  Optimizing Supply Chain Collaboration Based on Joint Replenishment and Channel Coordination , 2005 .

[13]  Liang-Yuh Ouyang,et al.  Integrated vendor-buyer cooperative inventory models with controllable lead time and ordering cost reduction , 2006, Eur. J. Oper. Res..

[14]  Mohamad Y. Jaber,et al.  Coordinating a two-level supply chain with delay in payments and profit sharing , 2006, Comput. Ind. Eng..

[15]  Hui-Ming Wee,et al.  A collaborative inventory system with permissible delay in payment for deteriorating items , 2006, Math. Comput. Model..

[16]  Liang-Hsuan Chen,et al.  Integrated vendor-buyer cooperative inventory models with variant permissible delay in payments , 2007, Eur. J. Oper. Res..

[17]  Sarada Prasad Sarmah,et al.  Coordination and profit sharing between a manufacturer and a buyer with target profit under credit option , 2007, Eur. J. Oper. Res..

[18]  Yu-Chung Tsao,et al.  Channel coordination, trade credit and quantity discounts for freight cost , 2007 .

[19]  L. Ouyang,et al.  Optimal strategy for an integrated system with variable production rate when the freight rate and trade credit are both linked to the order quantity , 2008 .

[20]  L. Ouyang,et al.  The optimal pricing and ordering policy for an integrated inventory model when trade credit linked to order quantity , 2009 .