The optimal ordering policy with multiple periods under two-echelon trade credit

Abstract

When suppliers bring out a new product, they often allow the retailers to pay for it at the reorder point (it is one term of trade credit). Moreover, the retailers also offer the customers the trade credit in order to extend the market of this product. So this paper describes an EOQ model with multiple periods and different demand rate under two -echelon trade credit in which the supplier allows the retailer to pay at the reorder point and the retailer offers a certain permissible delay period to the customer. Then, the retailer's inventory system is investigated as a cost minimization problem to determine the retailer's optimal ordering policy. Finally a numerical example is given to verify the validity of the model.