A resilient hybrid payment supply chain inventory model for post Covid-19 recovery

Abu Hashan Md Mashud; Md Rakibul Hasan; Yosef Daryanto; Hui-Ming Wee

doi:10.1016/j.cie.2021.107249

A resilient hybrid payment supply chain inventory model for post Covid-19 recovery

Comput Ind Eng. 2021 Jul:157:107249. doi: 10.1016/j.cie.2021.107249. Epub 2021 Mar 22.

Authors

Abu Hashan Md Mashud¹, Md Rakibul Hasan^{1

2}, Yosef Daryanto³, Hui-Ming Wee⁴

Affiliations

¹ Department of Mathematics, Hajee Mohammad Danesh Science and Technology University, Dinajpur 5200, Bangladesh.
² Division of Engineering Management and Decision Sciences, College of Science and Engineering, Hamad Bin Khalifa University, Doha, Qatar.
³ Department of Industrial Engineering, Universitas Atma Jaya Yogyakarta, Yogyakarta, Indonesia.
⁴ Department of Industrial and Systems Engineering, Chung Yuan Christian University, 200 Chung-Pei Rd., 32023, Chung-li, Taiwan.

Abstract

The present Covid-19 pandemic causes disruptions to markets and businesses in general, affecting the supply chain inventory system most significantly. This work investigates a hybrid payment inventory model considering inflation, cash discount, price-sensitive demand, and preservation technology investment for non-instantaneous deteriorating products. Due to the economic downturn, a hybrid payment scheme composed of multiple prepayments and a delay in payment is proposed to facilitate post Covid-19 recovery. The proposed model is one of the first models to consider a hybrid payment scheme in view of the Covid-19 pandemic, and to provide guidelines to retailers in planning the selling price, replenishment period, and preservation investment in view of the pandemic situation. The hybrid payment policy is suggested during the financial crisis to sustain orders from a retailer to the supplier and from the consumers to the retailer. During the supply disruptions, two cases for shortages and without shortages are studied. The nonlinear model is solved by Lingo 17 software. This study shows the effect of advance and delayed payments on the retailer's total profit. It also shows that the total profit is extremely delicate to the inflation rate. The numerical examples illustrate the inventory model for different scenarios. Sensitivity analysis is carried out to provide managerial insights to management during post Covid-19 recovery.

Keywords: Disruption; Hybrid payment; Inflation; Post Covid-19 recovery; Preservation technology; Price-sensitive demand.