Research On Supply Chain Operational Decision Based On Trade Credit

Trade credit is a kind of credit provided to each other in the form of deferred payment or prepayment when goods or services are transacted between different enterprises.In general,the seller provides trade credit for the delay payment,and the buyer to provide tradecredit for the advance payment.Delay payment means that the seller offers different time limits to the buyer according to the different order quantity.A period of time after the completion of the commodity transaction can reduce the buyer's cash flow needs,and thus will not cause the cash flow difficulties of commodity turnover.Advance payment is the buyer must pay a deposit before they receive the behavior.Prepayment to the buyer in advance a certain amount of funds to avoid the seller due to financial problems arising from shortages and credit risk of production of goods.Based on two different forms of trade credit,the following studies are carried out:Firstly,we study that how the fairness preferences affect trade credit and pricing strategy of supply chain considering the fairness preference.First,we build the decision models in three cases:the supplier with fairness preference,the retailer with fairness preference and both with the fairness preference.The paper analyses the optimal trade credit period of the supplier and the optimal retail price of the retailers adopting the Stackelberg game.The study finds that when the retailer has the fairness preference,the retail price of retailer does not change with the degree of fairness preference;when the retailer have greater fairness preference,the credit term that supplier can provide is longer.In the case of only supplier having fairness preference,when the supplier have greater fairness preference,the retail price of retailer is lower,and the trade credit term that supplier can provide is shorter;in the case of both the sides have fairness preferences,the retail price is increasing with the preferences;the trade credit term that the supplier can provide is increasing with the preference coefficient of himself and is decreasing function on the preference coefficient of the retailers.The utility functions for the supply chain members is increasing with its preference,and decreasing with the other's preference coefficient;with both sides having fairness preference,the supply chain profit is less than the supply chain profit with no fairness preference.And then,we study that how the prepayment mechanism affect trade credit and pricing,under the circumstance of market supply and demand uncertainty,the prepayment mechanism is introduced into supply chain decision-making research,and the prepayment mechanism is introduced separately in the case of emergency ordering and emergency ordering.Membership decisions and performance.The study found that in a random supply and demand's supply chain operations,the expected profit of the supplier increases with the variance of the market demand and decreases with the variance of the market demand.The expected profit of the retailer decreases as the variance of the market demand increases.The variance of the market demand increases.