 Retailer's optimal replenishment policy under cash discount and trade credit linked to order quantityJun Li and Hairong Feng International Journal of Information and Decision Sciences, 2010, vol. 2, issue 4, 375-400 Abstract: This paper develops a model to investigate the optimal retailer's replenishment decisions when the supplier provides cash discount and delay in payments if the retailer's order quantity is greater than or equal to a predetermined quantity, and the retailer adopts the trade credit policy to stimulate his/her customer. Under these assumptions, we model the retailer's inventory system as a profit maximisation problem. Then, we establish an algorithm to locate the optimal replenishment cycle time for the retailer. Furthermore, numerical examples are presented to illustrate the results of the proposed model. Based on our analysis, it is found that the predetermined order quantity could be a successful strategy for the supplier to encourage the retailer to order large quantity and it should be set carefully since the retailer may decide not to order a quantity greater than the threshold to obtain delayed payments if the predetermined order quantity is too high. Keywords: inventory modelling; cash discount; delay in payments; trade credit; optimal replenishment policy; order quantity; retailer replenishment decisions; retailing. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijidsc:v:2:y:2010:i:4:p:375-400 Access Statistics for this article More articles in International Journal of Information and Decision Sciences from Inderscience Enterprises Ltd |
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