Supply Chain Coordination With Credit Period Considering Different Situation

In modern business, supply chain coordination with credit period becomes more and more popular. Supply chain coordination with credit period without any interest charging means introducing credit period as a coordination mechanism, researching the performance of the whole supply chain after adopting it. This article is studied the coordination with credit period from two aspects. First part is for considering controllable lead time in the supply chain coordination with credit period and the second is for considering different financial environments in the supply chain coordination with credit period.Regarding to the controllable lead time in the supply chain coordination with credit period, the model based on one retailer and one supplier, is designed to minimizing the cost and the constrains including the demand satisfying normal distribution, stockout allowed, ordering cost controllable. In the whole analysis process, first calculated the individual cost for both supplier and retailer without coordination using proposed algorithm in the article, and then using the modified algorithm to calculate the whole cost of the supply chain system with coordination considering period credit and figure out the optimal order quantity, safety factor, the length of lead time, order cost and the length of credit period. Through comparison of the two conditions'results, it comes to the conclusion that when introducing credit period as a coordination mechanism, the supplier, retailer and the whole supply chain system cost would be reduced and the order quantity would be increased as well. Whereas there is a possibility that credit period is failure for use.Through considering different financial environments in the real business, when the credit period is introduced by the supplier in the coordination mechanism, the supplier set up a certain credit period and the retailer can either pay off the doubt at the end of the credit period or delay incurring interest charges. This article makes a comparison of the profitable rate and disciplinal rate as distinguishing the different financial environment faced by the retailer, designing the optimal model to maximize the retailer's total profit and decide the optimal order cycle time, order quantity and payoff time. In conclusion, make a specific explanation for the effect of the different profitable rate and disciplinal rate.