This study examines the effects of dynamic discounting based credit payment on a supply chain network design problem. Dynamic discounting based credit payment is a supply chain finance policy wherein the supplier provides a credit period to a distribution center (DC) with a discount applied if the DC pays the supplier before the end of the credit period. This study also considers the time value of money and applies discounted cash flows to formulate a model that determines the DC’s optimal replenishment cycle, selling price, and influence area while maximizing the present value of the total profit. The continuous approximation approach is applied to formulate a mathematical model of the problems, and an algorithm based on non-linear optimization is established to solve the problem. A numerical example and a sensitivity analysis are provided to present the proposed model and solution approach and to illustrate the effect of each cost on the decisions and profit.
Accepté le :
Première publication :
Publié le :
DOI : 10.1051/ro/2021111
Keywords: Supply chain network design, continuous approximation approach, trade credit, dynamic discounting
@article{RO_2021__55_4_2545_0,
author = {Tsao, Yu-Chung and Setiawati, Mutia and Linh Vu, Thuy and Sudiarso, Andi},
title = {Designing a supply chain network under a dynamic discounting-based credit payment program},
journal = {RAIRO. Operations Research},
pages = {2545--2565},
year = {2021},
publisher = {EDP-Sciences},
volume = {55},
number = {4},
doi = {10.1051/ro/2021111},
mrnumber = {4305771},
zbl = {1475.90011},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2021111/}
}
TY - JOUR AU - Tsao, Yu-Chung AU - Setiawati, Mutia AU - Linh Vu, Thuy AU - Sudiarso, Andi TI - Designing a supply chain network under a dynamic discounting-based credit payment program JO - RAIRO. Operations Research PY - 2021 SP - 2545 EP - 2565 VL - 55 IS - 4 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2021111/ DO - 10.1051/ro/2021111 LA - en ID - RO_2021__55_4_2545_0 ER -
%0 Journal Article %A Tsao, Yu-Chung %A Setiawati, Mutia %A Linh Vu, Thuy %A Sudiarso, Andi %T Designing a supply chain network under a dynamic discounting-based credit payment program %J RAIRO. Operations Research %D 2021 %P 2545-2565 %V 55 %N 4 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2021111/ %R 10.1051/ro/2021111 %G en %F RO_2021__55_4_2545_0
Tsao, Yu-Chung; Setiawati, Mutia; Linh Vu, Thuy; Sudiarso, Andi. Designing a supply chain network under a dynamic discounting-based credit payment program. RAIRO. Operations Research, Tome 55 (2021) no. 4, pp. 2545-2565. doi: 10.1051/ro/2021111
[1] and , Supply chain network design using trade credit and bank credit: a robust optimization model with real world application. Comput. Ind. Eng. 125 (2018) 69–86. | DOI
[2] , , and , A dynamic closed-loop location-inventory problem under disruption risk. Comput. Ind. Eng. 90 (2015) 414–428. | DOI
[3] , and , Joint inventory-location problem under the risk of probabilistic facility disruptions. Transp. Res. Part B: Methodol. 45 (2011) 991–1003. | DOI
[4] and , The simplified solution algorithm for an integrated supplier-buyer inventory model with two-part trade credit in a supply chain system. Eur. J. Oper. Res. 213 (2011) 156–165. | MR | Zbl | DOI
[5] and , Continuous model for production-distribution system design. Eur. J. Oper. Res. 129 (2001) 287–298. | MR | Zbl | DOI
[6] , Dynamic discounting solving the late payment problem. https://www.itproportal.com/2016/05/12/dynamic-discounting-solving-the-late-payments-problem/ (accessed on April, 18) (2016).
[7] , , and , Competitive supply chain network design: an overview of classifications, models, solution techniques and applications. Omega 45 (2014) 92–118. | DOI
[8] , and , Design of supply chains under the risk of facility disruptions. Comput. Aided Chem. Eng. 32 (2013) 577–582. | DOI
[9] , , and , An optimisation strategy for concurrent supply chain finance schemes. J. Purchasing Supply Manage. 25 (2019) 185–196. | DOI
[10] , , and , Supply chain finance: modelling a dynamic discounting programme. J. Adv. Manage. Sci. 4 (2016) 283–291. | DOI
[11] and , Trade credit competition between two retailers in a supply chain under credit-linked retail price and market demand. Optim. Lett. 8 (2014) 2065–2085. | MR | Zbl | DOI
[12] , Economic order quantity under conditions of permissible delay in payments. J. Oper. Res. Soc. 36 (1985) 335–338. | Zbl | DOI
[13] , The state of dynamic discounting in B2B payments. https://spendmatters.com/2020/06/24/the-state-of-dynamic-discounting-in-b2b-payments/ (accessed on April, 18) (2020).
[14] , and , Optimal pricing, shipment and payment policy for an integrated supplier-buyer inventory model with two-part trade credit. Eur. J. Oper. Res. 187 (2008) 496–510. | MR | Zbl | DOI
[15] and , Supply chain model with stochastic lead time, trade-credit financing, and transportation discounts. Math. Prob. Eng. 2017 (2017). DOI: 10.1155/2017/6465912. | MR | Zbl
[16] , and , , Pricing and lot-sizing policies for perishable products with advance-cash-credit payments by a discounted cash-flow analysis. Int. J. Prod. Econ. 193 (2017) 578–589. | DOI
[17] , , and , Optimal pricing, lot-sizing and backordering decisions when a seller demands an advance-cash-credit payment scheme. Eur. J. Oper. Res. 278 (2019) 283–295. | MR | Zbl | DOI
[18] and , Supply chain networks with corporate financial risks and trade credits under economic uncertainty. Int. J. Prod. Econ. 137 (2012) 55–67. | DOI
[19] , Supply chain finance: the key link to an efficient supply chain. https://www.cfoinnovation.com/supply-chain-finance-key-link-to-efficient-supply-chain (accessed on October, 20) (2011).
[20] , , and , Optimizing a location allocation-inventory problem in a two-Echelon supply chain network: a modified fruit fly optimization algorithm. Comput. Ind. Eng. 87 (2015) 543–560. | DOI
[21] , and , A continuous approximation procedure for determining inventory distribution schemas within supply chains. Eur. J. Oper. Res. 186 (2008) 405–422. | Zbl | DOI
[22] , Distribution center network design under trade credits. Appl. Math. Comput. 222 (2013) 356–364. | MR | Zbl
[23] and , Supply chain network designs developed for deteriorating items under conditions of trade credit and partial backordering. Networks Spatial Econ. 16 (2016) 933–956. | MR | Zbl | DOI
[24] , , and , A continuous approximation approach for the integrated facility-inventory allocation problem. Eur. J. Oper. Res. 222 (2012) 216–228. | Zbl | DOI
[25] , and , A supply chain network design under advance-cash-credit payment scheme. ACM International Conference Proceeding Series (2019) 173–177.
[26] , , and , Discounted cash flow models. In: Risk and Return for Regulated Industries. Academic Press (2017). | DOI
[27] and , A continuum approximation approach to competitive facility location design under facility disruption risks. Transp. Res. Part B: Methodol. 50 (2013) 90–103. | DOI
[28] , and , Design of a pharmaceutical supply chain network under uncertainty considering perishability and substitutability of products. Inf. Sci. 423 (2018) 257–283. | MR | DOI
[29] and , The model and algorithm for determining optimal ordering/trade-credit policy of supply chains. Appl. Math. Comput. 219 (2012) 3809–3825. | MR | Zbl
[30] , , and , Optimal trade credit and replenishment policies for supply chain network design. Omega (United Kingdom) 81 (2018) 26–37.
[31] and , Retailer’s optimal ordering and payment strategy under two-level and flexible two-part trade credit policy. Comput. Ind. Eng. 142 (2020) 106317. | DOI
Cité par Sources :
