This paper develops an economic lot-sizing production model for deteriorating items with time dependent quadratic demand and delay in payments under two levels of trade credit policy. The trade credit policy adopted here is a two-level trade credit policy in which the supplier offers the retailer a permissible delay period M, and the retailer in turn provides customers a permissible delay perio...

Trade credit is a well established promotional tool in the present competitive world and its impact on demand cannot be ignored. Businesses often use trade credit to increase their market share and, in turn, the profit. Undoubtedly, trade credit plays a great role in increasing the demand but it also involves a great risk of nonpayment. In order to reduce the risk of non-payment, businessman at...

Traditional supply chain inventory modes with trade credit usually only assumed that the up-stream suppliers offered the down-stream retailers a fixed credit period. However, in practice the retailers will also provide a credit period to customers to promote the market competition. In this paper, we formulate an optimal supply chain inventory model under two levels of trade credit policy with d...

and Applied Analysis 3 Table 1: Comparison between the papers discussing integrated inventory model with a trade credit. Author s Demand rate Production rate Production/purchase cost Freight rate Wholesale price Abad and Jaggi 39 Retail price sensitive Constant Constant — Constant Jaber and Osman 40 Constant — — — Constant Yang and Wee 41 Retail price sensitive — Constant — Constant Sheen and T...

There is evidence that suppliers have private information about their customers’ credit risk. Yet, interest rates in trade credit markets are usually industry-not-firm specific. Why? If the demand for intermediate products is inelastic, suppliers should raise interest rates until they reach their customers’ outside option. By definition, this outside option cannot reflect information that is pr...

The aim of this paper is to analyse the role of trade credit in the financing of French small and medium-sized enterprises (SMEs) using specific data collected in a recent survey on small firms. We provide direct evidence that inter-firm credit offered by SMEs is sensitive to the strategic importance of firm size and position. Using existing theories, we also test a supply function and a model ...

S routinely sell goods to retailers on credit. Common credit terms are tantamount to a schedule of declining discounts (escalating penalties) that depend on how long the retailer takes to pay off the supplier’s loan. However, issues such as which stocking policies are optimal in the presence of supplier-provided credit have been investigated only when demand is assumed deterministic. Nearly all...

in this paper, we develop an inventory model with delay in payments for deteriorating items. in our model, retailer who purchases the items enjoys a fixed credit period offered by his/her supplier and, in turn, also offers a credit period to his/her customers in order to promote the market competition. the demand is assumed to be linear function of the retailer's current-stock level. the effect...