Inventory Control and Trade Credit Revisited

@article{Chung1989InventoryCA,
  title={Inventory Control and Trade Credit Revisited},
  author={Kee H. Chung},
  journal={Journal of the Operational Research Society},
  year={1989},
  volume={40},
  pages={495-498}
}
  • Kee H. Chung
  • Published 1 May 1989
  • Business
  • Journal of the Operational Research Society
This paper presents the discounted cash-flows (DCF) approach for the analysis of the optimal inventory policy in the presence of the trade credit. The DCF approach permits a proper recognition of the financial implication of the opportunity cost and out-of-pocket costs in inventory analysis. This approach also permits an explicit recognition of the exact timing of cash flows associated with an inventory system. As a result, the effect of the delayed payment is appropriately reflected in… 
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105 Citations
Highly Influential Citations
10
Background Citations
35
Methods Citations
32
Results Citations
2

105 Citations

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Citation Type

Credit financing in economic ordering policies of deteriorating items
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A time dependent deteriorating inventory model is developed for a deterministic inventory system with constant demand in the presence of trade credit. The discounted cash flows (DCF) approach is used…
Credit financing in economic ordering policies of time-dependent deteriorating items
This paper presents the economic ordering policies of time-dependent deteriorating items in presence of trade credit using of discounted cash-flows (DCF) approach. In inventory analysis a DCF…
The Algorithm to the EOQ Model for Inventory Control and Trade Credit
TLDR
It is indicated that some approximations to the optimal order quantities by Chung are sometimes inappropriate and a bisection numerical method is proposed to arrive at the optimal solution to the model.
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In this article, the purchaser’s optimal pricing and ordering policy is developed when units in inventory are subject to deterioration at a constant rate. The demand is assumed to be stock dependent…
Optimal ordering policy under two stage trade credits financing for deteriorating items using discounted cash flow approach
This paper develops an inventory model under two levels of trade credit policy by assuming the demand is a function of credit period offered by the retailer to the customers for deteriorating items…
Discount Cash-Flow Analysis on Inventory Control under Various Supplier's Trade Credits
In practices, the supplier may simultaneously offer the customer: (1) a permissible delay in payments to attract new customers and increase sales, and (2) a cash discount to motivate faster payment…
The optimal ordering policy of the EOQ model under trade credit depending on the ordering quantity from the DCF approach
An Optimal Replenishment Policy for the EPQ model with Permissible Delay in Payments
Most of the past researches on economic replenishment quantity did not consider the trade credit period. In practice, however, companies in Taiwan have shown that taking the trade credit period into…
Optimal ordering policies for deteriorating items using a discounted cash-flow analysis when a trade credit is linked to order quantity
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References

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Inventory Control and Trade Credit
Using generally accepted principles of financial analysis, this paper argues that, if trade credit has the character of a renewable source of capital, the usual assumptions as to the incidence and…
Inventory Policy and Trade Credit Financing
It is common business practice to purchase inventory on open account. Consequently, purchased inventory can be considered to be financed in whole or in part with trade credit. This paper investigates…
Inventory Control and Trade Credit—A Reply to Daellenbach
An earlier paper by the authors discussed the importance of credit policies in the basic economic-order-quantity inventory model. Recently this analysis has been questioned, and a different result…
Credit Policy and Inventory Control
Credit policies are shown to be important in the basic economic order quantity inventory model. An economic order quantity model is derived which explicitly considers possible credit periods allowed…
Evaluating Investment in Inventory Policy: A Net Present Value Framework
ABSTRACT This paper provides a method for evaluating investment in inventory that is consistent with a wealth maximizing objective. Theoretical superiority and conceptual straightforwardness of the…
A PRESENT VALUE FORMULATION OF THE CLASSICAL EOQ PROBLEM
The usual analysis of the deterministic economic order quantity problem seeks to minimize the average cost of inventory ordering and holding costs per unit time. An alternative approach described in…
The Effect of Payment Rules on Ordering and Stockholding in Purchasing
The payment conditions for the purchase of raw materials and components have received little attention in the literature on inventory control. A common practice is to require payment by some specific…
Inventory Control and Trade Credit-A Further Reply
Inventory Control and Trade Credit-A Rejoinder