Optimal pricing and ordering policies for perishable products under advance-cash-credit payment scheme
Recently, market globalization and competition have forced companies to find alternative means to boost sales and revenue. The use of the cash flow is increasingly becoming a viable alternative for managers to improve their company’s profitability in a supply chain. In today’s business transactions, a supplier usually asks a manufacturer to pay via the advance-cash-credit (ACC) payment scheme if the number of goods procured is high. Additionally, product perishability has been considered in an economic production quantity (EPQ) model since it is a real phenomenon. The present work develops an EPQ model for perishable products under the ACC payment scheme. The objective of the proposed model is to determine the optimal selling price and cycle time while maximizing profit under the ACC payment scheme using a discounted cash flow analysis. A nonlinear optimization algorithm is also proposed to solve the problem. In addition, some numerical examples are employed to illustrate the solution approach and show the concavity of the present value of the total annual profit in terms of both selling price and cycle time. The numerical results show that our proposal algorithm could be applied well to solve the problems. In addition, a sensitivity analysis is conducted to obtain some managerial insights. For example, if the impact of advance payment on procurement cost is relatively smaller than that of cash payment, then it is more profitable for the manufacturer to ask for a cash payment than to receive an advance payment and vice versa.
In many industrial settings, managers face the problem of establishing a pricing policy that maximizes the revenue from selling a given inventory of items by a fixed deadline, with the full inventory of items being available for sale from the beginning of the selling period. This problem arises in a variety of industries, including the sale of fashion garments, flight seats, and hotel rooms. We...متن کامل
Optimal pricing and replenishment policies for instantaneous deteriorating items with backlogging and trade credit under inflation
In this paper we develop an economic order quantity model to investigate the optimal replenishment policies for instantaneous deteriorating items under inflation and trade credit. Demand rate is a linear function of selling price and decreases negative exponentially with time over a finite planning horizon. Shortages are allowed and partially backlogged. Under these conditions, we model the ret...متن کامل
This paper tries to incorporate both Chung and Huang (2003b) and Huang and Chung (2003) to develop the buyer’s inventory model. That is, we want to investigate the buyer’s optimal cycle time and optimal payment time under supplier’s trade credit policy and cash discount policy. Mathematical models have been derived for obtaining the optimal cycle time and optimal payment time for item under sup...متن کامل
In this note, we modify the model of Huang  discussed with retailer’s ordering policy under conditions of cash discount and trade credit. Mathematical model has been modified for obtaining the optimal cycle time and optimal payment policy for item under cash discount and trade credit so that the annual total cost is minimized. Then, we provide a theorem to efficiently determine the optimal ...متن کامل
This paper studies optimal pricing policies for a family of substitute perishable products with demand correlation. Potential buyers arrive according to an exogenous stochastic Poisson process. At each demand epoch, the arriving customer observes the set of substitute products for which there is still inventory available together with their corresponding prices. Based on this information, the c...متن کامل
This thesis presents a dynamic pricing model where a seller offers two types of a generic product to a random number of customers. Customers show up sequentially. When a customer arrives, he will —depending on the prices—either purchase one unit of type 1 product or one unit of type 2 product, or will leave empty-handed. The sale ends either when the entire stock is sold out, or when the custom...متن کامل
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دوره 15 شماره 1
تاریخ انتشار 2019-12-01
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