Supplier–customer negotiation model: the vendor receives a bonus for holding the inventory
Author
Marimon, Frederic
Berbegal-Mirabent, Jasmina
Publication date
2018-11ISSN
2385-3921
Abstract
This article proposes a model based on economic order quantity (EOQ) for the negotiation
between supplier and customer when a benefit is derived to the supplier from taking
responsibility for the inventory holding costs. In turn, the customer can afford a smaller
batch size since the holding savings enable it to place a greater number of orders.
Taking the original situation in which the customer supports both holding and ordering
cost as an initial point, the paper analyses the benefits for the supplier and customer in a
new situation in which the supplier supports the holding of the inventory. The customer
would agree to change to the new scenario due to the savings in the holding cost. The
provider would also agree if a bonus is achieved as compensation for the investment in
holding costs.
The model provides clues for a win-win negotiation between a supplier and a buyer.
Document Type
Article
Document version
Accepted version
Language
English
Subject (CDU)
33 - Economics. Economic science
Keywords
Gestió d'estocs
Inventory control
Gestión de stocks
Inventaris
Inventories
Inventarios
Pages
15
Publisher
Associació Catalana de Comptabilitat i Direcció (ACCID)
Collection
5;1
Is part of
European Accounting and Management Review (EAMR)
Citation
Marimon Viadiu, Frederic; Berbegal-Mirabent, Jasmina. «Supplier–customer negotiation model: the vendor receives a bonus for holding the inventory». European Accounting and Management Review (EAMR), 2018, vol. 5, núm. 1, p. 94-108. Disponible en: <https://eamr-accid.eu/article-5-volume-5-issue-1/>. Fecha de acceso: 17 jun. 2019. https://doi.org/10.26595/eamr.2014.5.1.5
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