Study On The Stock And Risk Management Of Supply Chain Based On Trade Credit

Trade Credit has been applied more and more widely in practice as an effective way of supply management. It coordinates the relationships between different parties by providing every member in supply chain with incentive policies, thus developing the efficiency of the whole supply chain while the every member chasing for maximized profit. Therefore the whole supply chain is optimized and every member enjoys profit. There are two forms of trade credit tactics: delay in payment or prepayment. Delay in payment is the tactic that the seller provides buyer various due times for payment. Prepayment, on the contrary, the seller requires buyer to pay some earnest in advance before delivering goods in order to ensure his cash flow and lower credit risk. Previous studies of trade credit mainly focus on the delay in payment, while the prepayment is less emphasized. In this paper, we generally studied trade credit's influences on every party of supply chain on the basis of previous studies of the delay in payment.In Chapter 3, we studied the effect of supplier's prepayment policy on buyer's optimal inventory decision, in hope for providing some theoretical basis for buyer's order quantity decision when facing different credit trade conditions. Except for the objective function of total cost, this paper introduced DCF Method (Discount Cash Flow), and studied the optimal order quantity when payment is required to be paid wholly in advance, under the objective function of the present value of cost cash flow. Then we provided numerical study to prove the relationships between optimal order quantity and the variables.In Chapter 4 of the study, we focus on trade credit decision problems faced by the supplier, under the conditions that demand is inventory-dependent and credit risk. In the supply chain consisted of single distributor and single supplier, the supplier decides whether to take postponed payment or prepayment as credit policy, while the distributor determines his optimal order quantity according to credit policy provided by the supplier. In the study of Chapter 4, models of distributor's order quantity and supplier's expected profit are provided under the policies of postponed payment and prepayment, respectively. Expected profits of the supplier are also compared and analyzed in numerical study, thus providing the supplier with theoretical foundation of trade credit policy choice.