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In the face of increasingly complex market environment, supply chain members pay attention to the possibility of obtaining expected profits and various risks while considering profit maximization. The behaviors of decision makers are often influenced by their psychological preferences, and loss aversion is one of the basic characteristics of human economic behavior. We research the supply chain coordination problem with capital constraint and loss-averse retailer in the case of stochastic production and demand. In order to address the loss aversion, a novel utility function is structured according to the theory of mental account. Under wholesale price contract, the optimal expected utility of supply chain under decentralized decision is smaller than that under centralized decision due to the retailer’s constrained capital. Based on that, a model is constructed by making revenue sharing contract act as the dual role of supply chain coordination and delayed payment strategy without seeking external financing or internal financing, and the contract conditions and optimal decisions of the coordinated supply chain are solved. Theoretical analysis indicates that when the contract parameters are properly selected, even though the retailer’s capital is constrained, the revenue sharing contract can not only coordinate the supply chain but also realize the arbitrary distribution of supply chain profits within a certain range. Finally, the change of decision variables and expected utility or profit with contract parameters is analyzed by several numerical examples.

One of unrealistic assumptions in classical EOQ model is that the items received are all good quality. In real life, it is very difficult for all the products received to achieve a 100% qualified rate due to various imperfect production or transportation processes, which has effect on determining the order size and related inventory control parameters. In addition, nowadays trade credit is widespread and become an important form of company finance. Supplier realizes that retailers are interested to buy more items if they are offered some credit periods to pay the whole cost of items instead of paying immediately. This paper extends the work of Chung and Huang [29] by considering that shortages are allowed and occur as lost sales where the loss of stock out and the salvage of the residue are counted into the cost. An inventory model optimizing the retailer's expected profit per unit time is established under permissible delay in payments. Three theorems are developed to derive the optimal replenishment policy. Finally, sensitivity analysis on main parameters is given by numerical examples.

In the classical economic order quantity (EOQ) models, a common unrealistic assumption is that all the items received are of good quality. However, in realistic environment, a received shipment usually contains a fraction of imperfect quality items. These imperfect items may be scrapped, reworked at a cost, or salvaged at a discounted price. While the percentage of imperfect items is random, the optimal ordering cycle is rarely considered in current literatures. This paper revisits the model (Maddah and Jaber, 2008) and extends it by assuming that the ordering cycle is determined by the demand rate, delivery quantity per shipment, and the mathematical expectation of the defective rate. The possibility of stockout or residue in the end of a cycle will be considered, and the loss of stockout and the salvage of the residue are counted into the cost. Besides, we consider consolidating the shipments of imperfect items over multiple deliveries. Thus, an integrated vendor-buyer inventory model for imperfect quality items with equal-size shipment policy is established to derive the optimal ordering cycle, ordering quantity, and number of deliveries. The computational method of the optimal delivery quantity per shipment and number of deliveries is given through theoretical results. Finally, sensitivity of main parameters is analyzed through simulation experiments and shown by some figures.

Researchers in the past have established the newsvendor model with rarely considering trade credit. In practices, the supplier usually provides the retailer a permissible delay in payments to stimulate more order quantity. As a result, we try to establish an inventory model for stochastic demand, in which the supplier provides trade credit to the retailer if the order quantity is greater than or equal to a predetermined quantity. The residual or shortage at the end of the cycle is dealt as the newsvendor problem. Two useful theorems to determine the optimal order quantity are derived. Several numerical examples are provided to illustrate the results. The sensitivity analysis on main parameters is presented.

This study presents a deterministic economic order quantity model for a retailer to determine its optimal replenishment number and replenishment schedule in a finite time horizon. The retailer's demand rate is time dependent and the supplier offers a trade credit to the retailer when the retailer's order quantity exceeds a given pre-specified quantity. To maximize the retailer's profit, a mathematical model is developed when the demand rate is a generalized function of the time and the trade credit linked to order quantity is adopted. By analyzing the retailer's profit function, we develop some useful results to characterize the optimal solution and provide an iterative algorithm to find the replenishment schedule and the retailer's order quantities. Numerical examples with different types of demand function are presented to validate the proposed model and the algorithm. Sensitivity analysis of the major parameters including of the quantity at which the delay in payments permitted and the trade credit period are presented.

The optimal order cycle is very important in production decision, especially in the process of continuous production. In this paper, we try to determine the optimal replenishment cycle in an EOQ model for defective items. In the proposed model, the defective rate of products is a random variable and the order cycle is determined by the expected defective rate, order quantity and demand rate. Two possibilities of residual or shortage at the end of the cycle are considered. The optimal replenishment and the order quantity are determined by maximizing the expected profit as the objective. The validity of the model is verified through the simulation experiments. Sensitivity analysis of the main parameters is presented.