Volume 55, Number 4, July-August 2021
|Page(s)||2545 - 2565|
|Published online||30 August 2021|
Designing a supply chain network under a dynamic discounting-based credit payment program
Department of Industrial Management, National Taiwan University of Science and Technology, Taipei, Taiwan.
2 Artificial Intelligence for Operations Management Research Center, National Taiwan University of Science and Technology, Taipei, Taiwan.
3 Department of Business Administration, Asia University, Taichung, Taiwan.
4 Department of Medical Research, China Medical University Hospital, China Medical University, Taichung, Taiwan.
5 Department of Mechanical and Industrial Engineering, Universitas Gadjah Mada, Yogyakarta, Indonesia.
* Corresponding author: email@example.com
Accepted: 21 July 2021
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.
Mathematics Subject Classification: 90B05
Key words: Supply chain network design / continuous approximation approach / trade credit / dynamic discounting
© The authors. Published by EDP Sciences, ROADEF, SMAI 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform.
Data correspond to usage on the plateform after 2015. The current usage metrics is available 48-96 hours after online publication and is updated daily on week days.
Initial download of the metrics may take a while.