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This study investigates the joint replenishment and delivery problem taking trade credits the delay in payment permitted by suppliers and capacity-constrained into consideration (CJRD-TC). The CJRD-TC aims to minimize the total system costs by finding a reasonable replenishment and delivery schedule policy. In this paper, an opposite-based RUNge Kutta optimization algorithm (OBRUN) is proposed to compare with other intelligent algorithms, including the differential evolution (DE), RUNge Kutta optimization algorithm (RUN), sine cosine algorithm (SCA), and adaptive differential evolution with optimal external archive (JADE). The proposed algorithm is tested on 14 optimization functions. The values of average, standard deviation, and the best are the lowest for 12 functions, which demonstrates OBRUN is superior to other algorithms. We also provide graphs of search history, 2D views of functions, trajectory curve, average fitness history, and convergence curve of OBRUN, the balance between exploration and exploitation over the course of iterations can be observed. The convergence curves of five algorithms are also depicted, which show OBRUN has a fast convergence rate and accuracy than other algorithms. We conduct numerical experiments, parameter tuning, and sensitivity analysis for each of the small-scale, medium-scale, and large-scale number of items. The OBRUN can always find better solutions with the lowest mean values and the best-found total cost results than other algorithms. Indicators of the average optimality gap and the optimality gap dominate by the value of zero. These computational results have demonstrated OBRUN is a suitable and effective candidate for managers to solve the practical CJRD-TC problems. [ABSTRACT FROM AUTHOR]

Our model indicates that European firms across all size categories use trade credits to purchase 6%–15% of tangible fixed assets and 14%–30% of intangible assets in the short-run. A long-run target adjustment model shows that large firms eventually replace most of this temporary trade credit financing with cheaper sources of funds. However, even in the long-run, small firms finance 4%–6% of tangible fixed asset purchases and 5%–10% of intangible fixed asset purchases using trade credit. Since smaller firms do not have the same access to bank credit as larger firms, trade credit is used to fund long-term investments Trade credit is therefore a key component in the capital structure decisions of smaller firms and it should be included in their weighted-average cost of capital calculations.

Trade credit strategies – comprised of the approaches used by internationalising firms to set the payment terms and schedules for their customers – are one of the few levers available to new small firms to overcome the liability of outsidership. They are vital to entrepreneurial firms seeking to achieve international market growth in the context of scarce resources and limited knowledge of foreign markets and partners. Though under-explored and under-theorised to-date, trade credits may unlock material insights for predictive models of entrepreneurial growth. As such, our study develops and tests the notion that trade credits constitute an important mechanism for entrepreneurial firms to initiate goodwill and generate valuable referrals. However, our findings also suggest that while riskier trade credit strategies help first-time exporters combat exclusion from networks key to a firm's ability to internationalise, the attendant risks often have a detrimental impact on long-term profitability and survival, thus creating a decision-making conundrum for growth-aspirants. Drawing upon a sample of 88,000 export transactions by 1040 small lumber firms from 52 countries, we advance theory and practice by showing how trade credit strategies shape both growth and performance. [ABSTRACT FROM AUTHOR]

Despite the importance of trade credit as a source of financing, there is a significant and persistent decline in this form of short-term borrowing and lending over the 1979 to 2018 interval. The median firm's accounts receivable decreased by 52% while accounts payable ratio fell by 47%. The decline is systematic, as it is present in most industries and sub-samples of firms classified on different characteristics. Further, firms' trade credit ratios are significantly less than predicted ratios based on firm-specific characteristics and industry factors, and this deficiency, which is pervasive, becomes more negative over time. However, changes in macroeconomic factors such as financial shocks, interest rates, changes in monetary policy and corporate tax rates, credit available in the economy, and the transition from manufacturing to technology-oriented economy, explain the deficiency as well as the time pattern. [ABSTRACT FROM AUTHOR]

In this study, we employ system dynamics to study the combined effect of extended payment terms and a buyer's supply risk management practices on two outcomes: the supplier's bankruptcy risk and the buyer's financial bottom line. In conjunction with payment terms, we model the impact of two commonly recommended supply chain risk management (SCRM) practices: quick response to supply disruptions and use of a secondary (backup) source. Among other results, we uncover a feedback mechanism that contributes to the negative effect of extended payment terms on a supplier's finances and show that longer payment terms can worsen buyer outcomes, especially when the supplier faces a higher risk of disruptions. We also show that, when considered alongside extended payment terms, common SCRM practices may not always be beneficial for buyer firms. Our research suggests decisions related to SCRM and extended payment terms should not be made independently. [ABSTRACT FROM AUTHOR]

Our model indicates that European firms across all size categories use trade credits to purchase 6%-15% of tangible fixed assets and 14%-30% of intangible assets in the short-run. A long-run target adjustment model shows that large firms eventually replace most of this temporary trade credit financing with cheaper sources of funds. However, even in the long-run, small firms finance 4%-6% of tangible fixed asset purchases and 5%-10% of intangible fixed asset purchases using trade credit. Since smaller firms do not have the same access to bank credit as larger firms, trade credit is used to fund long-term investments Trade credit is therefore a key component in the capital structure decisions of smaller firms and it should be included in their weighted-average cost of capital calculations., Competing Interests: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper., (© 2023 The Authors. Published by Elsevier Ltd.)