Research On Retailer’s And Supplier’s Decision Making Under Delay In Payments

Delay in payments has become a very common phenomena commercial activity.Supplier can increase sales, and expand the market share by offering retailers delay inpayments. Retailer can use the sales income within the delay in payments to gaininvestment income which can effectively relieve enterprise financial pressure. Inaddition, retailer can also follow the supplier to expand sales volume, seize the market,set up good enterprise images by offering consumers delay in payments.Due to the important practical significance of delay in payments, the papersresearching on this aspect are more and more. Models are also more and morecomplex, more and more tally with actual situations, from one-level delay inpayments to two-level delay in payments, from durable products to deterioratingproducts, from completely delay in payments to partial delay in payments, from fixeddemand to variable demand and so on.In this paper, we summarize the previous research work, do some furtherdiscussion and research which is more realistic, we consider cash discount, partialdelay in payments, two-level delay in payments and so on, and expand fixed demandto variable demand. Most of the previous literatures seek the optimum order quantityin the view of retailer, this paper also stands in the supplier’s perspective, probes intothe designing of delay in payments that maximizes the supplier’s profit. This papermainly includes the following parts:(1) Retailer’s ordering strategy in one-level delay in payments, the modelcontains more than one point of cash discount, it is to find the retailers’ best choice ofpayment time and the optimum ordering quantity.(2) Retailer’s ordering strategy in two-level delay in payments, from simple tocomplex, both retailer and consumers get completely delay in payments, retailer getscompletely delay in payments while consumers get partial delay in payments, bothretailer and consumers get partial delay in payments.(3) Retailer’s ordering strategy in one-level and two-level delay in paymentsconsidering variable demand.(4) Supplier’s decision making, how to design the best period of trade credit tomaximize its profit based on the retailer’s decision.