EconPapers    
Economics at your fingertips  
 

Synchronisation of order cycles of multiple buyers in a supply chain with trade credit policy

Chi Kin Chan, Y.C.E. Lee and Suresh Kumar Goyal

International Journal of Operational Research, 2016, vol. 27, issue 4, 562-588

Abstract: In this paper, we propose a coordinated single-vendor multi-buyer supply chain model by synchronising ordering and production cycles with trade credit option. The synchronisation is achieved by scheduling the ordering cycle of buyers and coordinating them with the vendor's production cycle. Such a policy results in lower total cost of the system very often at the expense of increased costs of the buyers. Hence, in order to compensate the increased cost of the buyers, a credit option scheme is proposed which can guarantee that the costs of all the buyers and the vendor, as a result of coordination, will be reduced when compared with independent optimisation. A profit-sharing scheme is also developed. A mathematical model is developed and an effective-and-efficient heuristics is proposed for our proposed coordination model. Numerical results are provided with results showing that the Pareto improvements can be achieved via the proposed trade credit incentive scheme. Such results are irrespective of the capital cost structure of the vendor and buyers in the supply chain.

Keywords: supply chain management; SCM; synchronisation; multiple buyers; trade credit; varying credit period; capital opportunity cost; order cycles; production cycles; scheduling; profit sharing; mathematical modelling; Pareto improvements. (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=80146 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijores:v:27:y:2016:i:4:p:562-588

Access Statistics for this article

More articles in International Journal of Operational Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().

 
Page updated 2025-03-19
Handle: RePEc:ids:ijores:v:27:y:2016:i:4:p:562-588