Research On Decision Making Of Supply Chain Based On Delayed Payments

As the market competition developed to this current stage, the competition ofsupply chains played a more important role among enterprises, whoever being in amature supply chain would have a significant competitive advantage. The issue onpayment delay that this paper focused on was a commonly used mode between up-stream and downstream enterprises in the supply chain, namely, the supplier provideda credit period for the retailers to complete the payment instead of the retailers payingimmediately after receiving the goods. It was beneficial for both sides while delayedpayment not only eased the financial pressure on retailers, but also expanded the scaleof the order by stimulating the retailers.While the past studies on delayed payment were mostly based on the retailer, andthe conclusions were also mostly for the retailer’s decision-making, this paper consid-ered the internal needs of the retailers and the suppliers both through calculating theircosts and profits. The first part described the background of the problem, literaturereview and related theories. The second part applied mathematical method to deter-mine the delayed payment demand model, and used game analysis method to deter-mine the discount rate for the suppliers, and also set up the retailer’s optimal orderingmodel. The last part followed the idea of deterministic needs, discussing the behaviorof the supply chain under non-deterministic demand condition.Through mathematical analysis, this paper reached a few conclusions including,firstly, whether the supply chain choose delayed payment or not depends on the ex-ternal conditions, and only by this way, could both sides achieve optimal profits.Secondly, when suppliers chose cash discount, they must also obey the outcome ofthe game theory, or can only harm their own interests. Thirdly, through expanding thedemand model under non-deterministic condition, this paper figured out the retailer’soptimal ordering point, drawing a conclusion that the outcomes are similar under de-terministic and non-deterministic condition.