Inventory Coordinantion With Delay In Payments

As the most effective management model to cope with the intensive competition, supply chain management requires cooperation between channel members and integrates the value chain, but decentralized decision making always damages the whole channel profit inevitably when all channel members try to maximize their own profits. Supply chain contract is an effective tool to avoid or reduce the damage of the value channel. Among these contracts delay in payments can afford some kinds of stimulations to encourage channel members make central decisions to coordinate their behaviors.Delay in payments is a favorable police afforded by sellers, when buyers increase their ordering sizes sellers always increase their paytimes. Traditionally, delay in payments is a price discrimination method used by suppliers to obtain costumers surplus; In supply chain management it is used as an important coordinate contract to promote the corporation of all channel members, lower the system transaction cost, increase profits, reduce market risk, improve costumers' satisfactions and realize the "double-win" between channel members.This paper fully analyzes the concept and significance of delay in payments and proposes the new system framework of research of delay in payments in supply chain management. It utilizes some theories and methods synthetically, such as contract theory, principal-agent theory, optimal control theory and several optimal methods to summarize, induce and extend the research of delay in payments under different conditions, such as information conditions (perfect information condition and asymmetric information condition), different items (normal item and deteriorate items), different discount forms (all units delay in payments and incremental delay in payments). The main work and conclusions can be concluded in the following five parts: In the first part, the paper summarizes the existed studies on delay in payments home and abroad, and points out the study directs.In the second part, this paper mainly focuses on the designing of all kinds of delay in payments under full and asymmetric information conditions. From the viewpoint of suppliers, this part begins from a simple model which assumes that retailer's inventory cost has nothing to do with the price. The paper discusses the exist probability and necessarily of delay in payments in supply chain management. Further, considering factors of bargaining power this part proposes contract designing methods under full information conditions, Going a step further, this part extends the delay in payments contract designing under asymmetric information conditions which assumes that retailers have their own inventory holding costs Analysis reveals that delay in payments is an effective coordinate contract to reduce system operational cost.In the third part, the paper investigates the retailers' inventory and reselling policy when they face delay in payments afforded by suppliers under different conditions if they want to maximize their profits (or minimize their operation cost).Based on the existed studies, this part consides optimal retailer's ordering policy under delay in payments and considering cash discount, two-warehouse inventory model with delay in payment, EOQ model under three levels of order-size-dependent delay in payments and optimal replenishment policy with delay in payment and varying demand rate under temporary price discount.In the fourth part, this paper analyses the inventory coordination under delay in payments in game theory. And consides stackelberg inventory model under delay in payment, optimal inventory decision under delay in payments considering duopolistic retailers' different competitive behaviors and optimal inventory decision under delay in payments considering profit maximize vs. revenue maximize.In the last part, this paper summarizes and analyses the disadvantages and defects of delay in payments and points out its risk in today's business environments. This part also shows the guarding model for default risk management under two term delay in payments.The study reveals that the design, complication and results are different under different assumptions. For example, under full information assumption the design method and contract form are simple, but under asymmetric information the design is difficult for retailer's "information hidden" and this leads to an imperfect coefficient rate. Retailers' ordering and pricing policy are also affected by different assumptions when they face delay in payments which decide optimal model built and the solution procedures design. The paper studies delay in payment thoroughly from the viewpoint of supplier, retailer and supply chain system. The increased relaxing of assumptions makes the research results more practical and practical, and this arrangement combines the research into a complete framework. In this framework, the innovative points of this paper are as following.(1) The paper designs some delay in payment contracts under full and asymmetric information and reach a serial of results which with theoretical and practical value, all delay in payment contracts are appear for the first time which can be used in supply chain management to reduce system operation cost.(2) Consider all-unit delay in payment, incremental delay in payment and limited capacity, temporary price discount, multistage, the paper builds several optimal operation models for retailers, the optimal models are appears for the first time, but also all the solution procedures which are in view of the models can solute practical problems. It is the theoretical expand of classical EOQ model and can used for retailer's replenishing and pricing decision to increase their profit.(3) This paper analyses the inventory coordination under delay in payments in game theory. And consides stackelberg inventory model under delay in payment, optimal inventory decision under delay in payments considering duopolistic retailers' different competitive behaviors and optimal inventory decision under delay in payments considering profit maximize vs. revenue maximize.(4) The paper proposes several new contract designing and application methods.The synthetic uses of optimal theory, principle-agent theory are creative. The guarding model for default risk management under two terms delay in payments designed can solute practical problems effectively, which can be the reference for the same problem.Through a deep and system study on delay in payments in supply chain management the paper realizes a comprehensive research in the field of delay in payments contracts designing, application and improvement. It enriches and completes the theories and practices of the delay in payments contracts in supply chain management. Every part of this work is independent comparatively and also has a progressive association relationship with other parts. This arrangement combines every part into a consistent entirety; the synthesis use of different theories and methods can provide new ideas and be a salutary experience for future research. This paper can guide enterprises to implement delay in payments effectively and improve the efficiency of supply chain management implementation.