The classical economic order quantity model of Wilson’s was developed with the assumption that the buyer must pay off immediately on arrival of the goods in the inventory system. In fact, offering buyers to delays payment for goods received is considered as a sales promotional tool in the business world. With offer of trade credit, vendor increases sales, attracts more buyers and reduces on – h...

This paper studies supply chain financing. We investigate why a firm extends trade credit to its customers and how this decision relates to its own financing. We use a novel firm-level database of Chinese firms with unique information on market power in both output and input markets and on the amount, terms, and payment history of trade credit simultaneously extended to customers (accounts rece...

The efficient management of a distribution system requires coordination between transportation planning and inventory control. Small and frequent shipments can reduce inventory levels while maintaining high customer service levels, but they increase unit transportation costs due to inappropriate utilization of the vehicles and more handling costs. On the other hand shipment consolidation polici...

In spite of its commercial importance and signs of clear concern in public policy arenas, trade credit has not been subjected to systematic, extended analysis in the business ethics literature, even where suppliers as a stakeholder group have been considered. This paper makes the case for serious consideration of the ethics of trade credit and explores the issues surrounding slow payment of deb...

This paper investigates the economic order quantity inventory model for a retailer under two levels of trade credit to reflect the supply chain management situation. It is assumed that the retailer maintains a powerful position and can obtain full trade credit offered by supplier, yet the retailer just offers the partial trade credit to customers. Under these conditions, the retailer can obtain...

We examine shareholder wealth implications of supplying financing to customers. Robust results suggest that excess returns and changes in trade receivables are directly and significantly related. Further evidence indicates the value of receivables is higher for suppliers with stronger motives relating to operating and contracting costs. The results also suggest a discounted value of receivables...

The delivery of freight from its origin to its destination is often managed through one or more intermediate facilities where storing, merging and consolidation activities are performed. This type of distribution systems is commonly called multi-echelon, where each echelon refers to one level of the distribution network. Multi-echelon distribution systems are often considered by public administ...

With over half a trillion dollars in trade credit flowing between firms the United States, it is critically important for managers to understand how that their firm receives and provides affect its value. Trade strategic investment supply chain relationships allows recipient make payment later rather than at time of sale. A downstream business customers also from upstream suppliers. Although re...