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Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age

In economics, a demand curve is almost always downward-sloping, reflecting the willingness of consumers to purchase more of the commodity at lower price levels. In addition, the demand for seasonal products (such as fashion apparels, beverages etc.) or perishable goods (such as meat and seafood, dai...

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Autores principales: Li, Ruihai, Teng, Jinn-Tsair, Chang, Chun-Tao
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8493055/
https://www.ncbi.nlm.nih.gov/pubmed/34629608
http://dx.doi.org/10.1007/s10479-021-04272-0
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author Li, Ruihai
Teng, Jinn-Tsair
Chang, Chun-Tao
author_facet Li, Ruihai
Teng, Jinn-Tsair
Chang, Chun-Tao
author_sort Li, Ruihai
collection PubMed
description In economics, a demand curve is almost always downward-sloping, reflecting the willingness of consumers to purchase more of the commodity at lower price levels. In addition, the demand for seasonal products (such as fashion apparels, beverages etc.) or perishable goods (such as meat and seafood, dairy products, fruit and vegetables, pharmaceutical products, and chemicals) decreases over time. Hence, demand is a function of price and stock-age. With large business transactions, a seller usually demands a down payment (i.e., an advance payment) to ensure that the buyer is making a serious offer. Conversely, a buyer frequently requests to hold a fraction of total purchase cost until the business transaction is completed and satisfactory (i.e., a credit payment). As a result, a combination of advance, cash, and credit (ACC) payments is commonly used in business transactions. This paper develops a supplier–retailer–customer chain in which the retailer receives an upstream ACC payment from the supplier while in return offers a down-stream cash-credit (some in cash and the remainder in credit) payment to customers, the demand is influenced by the combined effect of selling price and stock age, and the deterioration rate is time-varying. The retailer must determine optimal unit price and replenishment time to maximize the present value of total profit, which is strictly concave in selling price and strictly pseudo-concave in replenishment time. Finally, a sensitivity analysis is performed, and several managerial insights are obtained. For instance, an increase in the fraction of advance payment forces the retailer to raise selling price.
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spelling pubmed-84930552021-10-06 Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age Li, Ruihai Teng, Jinn-Tsair Chang, Chun-Tao Ann Oper Res Original Research In economics, a demand curve is almost always downward-sloping, reflecting the willingness of consumers to purchase more of the commodity at lower price levels. In addition, the demand for seasonal products (such as fashion apparels, beverages etc.) or perishable goods (such as meat and seafood, dairy products, fruit and vegetables, pharmaceutical products, and chemicals) decreases over time. Hence, demand is a function of price and stock-age. With large business transactions, a seller usually demands a down payment (i.e., an advance payment) to ensure that the buyer is making a serious offer. Conversely, a buyer frequently requests to hold a fraction of total purchase cost until the business transaction is completed and satisfactory (i.e., a credit payment). As a result, a combination of advance, cash, and credit (ACC) payments is commonly used in business transactions. This paper develops a supplier–retailer–customer chain in which the retailer receives an upstream ACC payment from the supplier while in return offers a down-stream cash-credit (some in cash and the remainder in credit) payment to customers, the demand is influenced by the combined effect of selling price and stock age, and the deterioration rate is time-varying. The retailer must determine optimal unit price and replenishment time to maximize the present value of total profit, which is strictly concave in selling price and strictly pseudo-concave in replenishment time. Finally, a sensitivity analysis is performed, and several managerial insights are obtained. For instance, an increase in the fraction of advance payment forces the retailer to raise selling price. Springer US 2021-10-06 2021 /pmc/articles/PMC8493055/ /pubmed/34629608 http://dx.doi.org/10.1007/s10479-021-04272-0 Text en © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2021 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Original Research
Li, Ruihai
Teng, Jinn-Tsair
Chang, Chun-Tao
Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
title Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
title_full Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
title_fullStr Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
title_full_unstemmed Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
title_short Lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
title_sort lot-sizing and pricing decisions for perishable products under three-echelon supply chains when demand depends on price and stock-age
topic Original Research
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8493055/
https://www.ncbi.nlm.nih.gov/pubmed/34629608
http://dx.doi.org/10.1007/s10479-021-04272-0
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