The simplified solution algorithm for an integrated supplier-buyer inventory model with two-part trade credit in a supply chain system

Kun-Jen Chung and Jui-Jung Liao

European Journal of Operational Research, 2011, vol. 213, issue 1, 156-165

Abstract: Ho et al. [Ho, C.H., Ouyang, L.Y., Su, C.H., 2008. Optimal pricing, shipment and payment policy for an integrated supplier-buyer inventory model with two-part trade credit, European Journal of Operational Research 187, 496-510] discussed the integrated inventory model with two-part trade credit and presented an algorithm to solve it. Basically, Ho et al.'s inventory model is correct and interesting. However, this paper indicates that the solution algorithm described in Ho et al. (2008) can be simplified further. So, this paper can not only derive the optimally closed-form formulations for the optimal numbers of shipments but also develop different algorithms to improve those in Ho et al. (2008). Numerical examples illustrate that the algorithm to locate the optimal solution is rather accurate and rapid.

Keywords: Integrated; inventory; model; Delay; payment; Cash; discount; Demand; function; Supply; chain; system (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:213:y:2011:i:1:p:156-165

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