Inventory Control and Trade Credit Revisited

  title={Inventory Control and Trade Credit Revisited},
  author={Kee H. Chung},
  journal={Journal of the Operational Research Society},
  • 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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The Algorithm to the EOQ Model for Inventory Control and Trade Credit
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Optimal ordering policies using a discounted cash-flow analysis when stock – dependent demand and a trade credit is linked to order quantity
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Optimal ordering policy under two stage trade credits financing for deteriorating items using discounted cash flow approach
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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


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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
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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
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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
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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
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
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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