Supply chain coordination under trade credit and quantity discount with sales effort effects
type: Item
instance of: scholarly article
title: Supply chain coordination under trade credit and quantity discount with sales effort effects
zbMATH Open document ID: 1426.90033
DOI: 10.1155/2018/2190236
author: Zhihong Wang
author: Shaofeng Liu
published in: Mathematical Problems in Engineering
publication date: 2019-02-08T00:00:00Z
review text: Summary: The purpose of this paper is to investigate the role of trade credit and quantity discount in supply chain coordination when the sales effort effect on market demand is considered. In this paper, we consider a two-echelon supply chain consisting of a single retailer ordering a single product from a single manufacturer. Market demand is stochastic and is influenced by retailer sales effort. We formulate an analytical model based on a single trade credit and find that the single trade credit cannot achieve the perfect coordination of the supply chain. Then, we develop a hybrid quantitative analytical model for supply chain coordination by coherently integrating incentives of trade credit and quantity discount with sales effort effects. The results demonstrate that, providing that the discount rate satisfies certain conditions, the proposed hybrid model combining trade credit and quantity discount will be able to effectively coordinate the supply chain by motivating retailers to exert their sales effort and increase product order quantity. Furthermore, the hybrid quantitative analytical model can provide great flexibility in coordinating the supply chain to achieve an optimal situation through the adjustment of relevant parameters to resolve conflict of interests from different supply chain members. Numerical examples are provided to demonstrate the effectiveness of the hybrid model.
Mathematics Subject Classification ID: 90B05
Mathematics Subject Classification ID: 90B06
zbMATH DE Number: 7018623
MaRDI profile type: Publication
full work available at URL: https://doi.org/10.1155/2018/2190236
OpenAlex ID: W2801804135
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description: scientific article; zbMATH DE number 7018623