Article ID Journal Published Year Pages File Type
1023940 Transportation Research Part E: Logistics and Transportation Review 2007 17 Pages PDF
Abstract

In this paper we consider vendor-buyer channels subject to trade credit and quantity discounts for freight cost. We deal with the problems of determining the vendor’s credit period, the buyer’s retail price and order quantity while still maximizing profits. We focus on how channel coordination can be achieved using trade credit and how trade credit can be affected by quantity discounts for freight cost. We show that profits for both parties increase under channel coordination when the credit period is kept within an appropriate range. This range becomes wider as the discount for freight rates increases.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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