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Coordinating a three-level supply chain with delay in payments and a discounted interest rate

Show simple item record Moussawi-Haidar L. Dbouk W. Jaber M.Y. Osman I.H.
dc.contributor.editor 2014 2017-09-07T07:51:35Z 2017-09-07T07:51:35Z 2014
dc.identifier 10.1016/j.cie.2013.12.007
dc.identifier.issn 03608352
dc.description.abstract Both researchers and practitioners recognize the importance of the interactions between financial and inventory decisions in the development of cost effective supply chains. Moreover, achieving effective coordination among the supply chain players has become a pertinent research issue. This paper considers a three-level supply chain, consisting of a capital-constrained supplier, a retailer, and a financial intermediary (bank), coordinating their decisions to minimize the total supply chain costs. Specifically, we consider a retailer managing its cash through the supplier's bank, in return for permissible delay in payments from the supplier. The bank, benefiting from increasing its cash holdings with the retailer's cash deposits, offers the supplier a discount on its borrowing rate. We show that the proposed coordination mechanism achieves significant cost reduction, by up to 26.2percent, when compared to the non-coordinated model. We also find that, with coordination, the retailer orders in larger quantities than its economic order quantity, and that a higher return on cash for the retailer leads to a higher order quantity. Furthermore, we empirically validate our proposed coordination mechanism, by showing that banks, retailers, and suppliers have much to gain through collaboration. Thus, using COMPUSTAT datasets for the years 1950 through 2012, we determine the most important factors that affect the behavior of the retailers and suppliers in granting and receiving trade credit. Our results indicate that engaging into such a coordination mechanism is a win-win situation to all parties involved. © 2013 Elsevier Ltd. All rights reserved.
dc.format.extent Pages: (29-42)
dc.language English
dc.publisher OXFORD
dc.relation.ispartof Publication Name: Computers and Industrial Engineering; Publication Year: 2014; Volume: 69; no. 1; Pages: (29-42);
dc.source Scopus
dc.title Coordinating a three-level supply chain with delay in payments and a discounted interest rate
dc.type Article
dc.contributor.affiliation Moussawi-Haidar, L., Olayan School of Business, American University of Beirut, P.O. Box 11-0236, Riad El Solh, Beirut 1107-2020, Lebanon
dc.contributor.affiliation Dbouk, W., Olayan School of Business, American University of Beirut, P.O. Box 11-0236, Riad El Solh, Beirut 1107-2020, Lebanon
dc.contributor.affiliation Jaber, M.Y., Department of Mechanical and Industrial Engineering, Ryerson University, 350 Victoria Street, Toronto, ON M5B2K3, Canada
dc.contributor.affiliation Osman, I.H., Olayan School of Business, American University of Beirut, P.O. Box 11-0236, Riad El Solh, Beirut 1107-2020, Lebanon
dc.contributor.authorAddress Moussawi-Haidar, L.; Olayan School of Business, American University of Beirut, P.O. Box 11-0236, Riad El Solh, Beirut 1107-2020, Lebanon; email:
dc.contributor.authorCorporate University: American University of Beirut; Faculty: Suliman S. Olayan School of Business; Department: School of Business;
dc.contributor.authorDepartment School of Business
dc.contributor.authorFaculty Suliman S. Olayan School of Business
dc.contributor.authorInitials Moussawi-Haidar, L
dc.contributor.authorInitials Dbouk, W
dc.contributor.authorInitials Jaber, MY
dc.contributor.authorInitials Osman, IH
dc.contributor.authorReprintAddress Moussawi-Haidar, L (reprint author), Amer Univ Beirut, Olayan Sch Business, POB 11-0236, Beirut 11072020, Lebanon.
dc.contributor.authorUniversity American University of Beirut
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dc.description.citedCount 1
dc.description.citedTotWOSCount 1
dc.description.citedWOSCount 1
dc.format.extentCount 14
dc.identifier.coden CINDD
dc.identifier.scopusID 84892767019
dc.relation.ispartofFundingAgency NSERC, Natural Sciences and Engineering Research Council of Canada
dc.relation.ispartOfISOAbbr Comput. Ind. Eng.
dc.relation.ispartOfIssue 1
dc.relation.ispartofPubTitle Computers and Industrial Engineering
dc.relation.ispartofPubTitleAbbr Comput Ind Eng
dc.relation.ispartOfVolume 69
dc.source.ID WOS:000332440400004
dc.type.publication Journal
dc.subject.otherAuthKeyword Cash management
dc.subject.otherAuthKeyword Coordination
dc.subject.otherAuthKeyword Delay in payment
dc.subject.otherAuthKeyword Lot sizing
dc.subject.otherAuthKeyword Supply chain management
dc.subject.otherIndex Cash Management
dc.subject.otherIndex Coordination
dc.subject.otherIndex Coordination mechanisms
dc.subject.otherIndex Delay in payment
dc.subject.otherIndex Economic order quantity
dc.subject.otherIndex Inventory decisions
dc.subject.otherIndex Lot sizing
dc.subject.otherIndex Permissible delay in payments
dc.subject.otherIndex Supply chain management
dc.subject.otherIndex Sales
dc.subject.otherKeywordPlus INTEGRATED INVENTORY MODEL
dc.subject.otherKeywordPlus TRADE CREDIT
dc.subject.otherKeywordPlus CASH BALANCE
dc.subject.otherKeywordPlus TRANSACTIONS DEMAND
dc.subject.otherKeywordPlus PERMISSIBLE DELAY
dc.subject.otherKeywordPlus MANAGEMENT
dc.subject.otherKeywordPlus VENDOR
dc.subject.otherKeywordPlus POLICY
dc.subject.otherWOS Computer Science, Interdisciplinary Applications
dc.subject.otherWOS Engineering, Industrial

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