Coordination between vendor and buyer considering trade credit and items of imperfect quality

Liang-Hsuan Chen, Fu Sen Kang

Research output: Contribution to journalArticlepeer-review

76 Citations (Scopus)


Vendor-buyer models for trade credit issues in the existing literature always consider the items produced as perfect. However, a number of items in a lot may be of imperfect quality. This paper extends Chen and Kang's [2007. Integrated vendor-buyer cooperative models with variant permissible delay in payments. European Journal of Operational Research 183 (2), 658-673] study to develop integrated vendor-buyer models that consider a permissible delay in payment and imperfect quality to determine the optimal solutions of the buyer's order quantity and the frequency for each vendor's production run. To establish a cooperative relationship between the vendor and buyer for a win-win situation, a simple solution algorithm is presented to determine the cost saving of each side when the warranty cost per unit is increased. A numerical example is used to illustrate the results for the proposed models.

Original languageEnglish
Pages (from-to)52-61
Number of pages10
JournalInternational Journal of Production Economics
Issue number1
Publication statusPublished - 2010 Jan 1

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering


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