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Manufacturer’s Decision and Supply Chain Coordination under Partial Delay in Payments |
ZHANG Yi-Gang, TANG Xiao-Wo |
1. University of Electronic Science and Technology of China, Chengdu, China; 2. Southwest University of Finance and Economics, Chengdu, China |
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Abstract Taking the retailer’s capital constraint into account, the retailer can pay the manufacturer partially at first and discharge the surplus amount at the end of the sale cycle. This case is equal to the manufacturer provides financing for the retailer’s purchase. The manufacturer will get capital interest and can restrict the retailer’s order quantity as financial conditions. The model of expected profit has been found within the newsvendor model framework. After discussing the model, the optimal policies of the manufacturer under different retailer’s reserved profit are made by iterative algorithm. When the retailer’s reserved profit is more than certain value the supply chain coordination is achieved by restricting the retailer’s order quantity. The conclusions are tested by numerical examples at last.
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Received: 19 July 2010
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