Research On The Optimal Ordering Policy Of Deteriorating Products Under The Two-level Trade Credit

This paper considers a supply chain model of supplier-retailer-consumer.The supplier provides trade credit to the retailer.Suppose that the delay time of the payment is M.At the same time,the retailer also provides consumers with trade credit to promote consumption and reduce inventory.Suppose that the delayed payment time is N.From the perspective of the retailer,providing consumers with delayed payment time N can promote consumption and increase its revenue,but at the same time,thiswill cause an opportunity cost to the retailer.The retail price of the goods will also affect the sales volume and the retailer's revenue.For retailers,Determining the retail price is also an important decision strategy.Sothis paper will determine the optimal replenishment time and the retail price by establishing the supply chain model to maximize the supply chain's revenue.The number of many commodities will gradually decrease during the preservation period,such as fruits,vegetables,medical drugs,etc.During the inventory time of these commodities,the quantity will continue to decrease.So the final sales volume is not only related to the order quantity,but also related to the shelf life of the product.This paper will consider the deterioration in the model.The basic assumptions of the supplier-retailer model established in this paper are as follows:(1)The supplier provides trade credit to the downstream retailer of the supply chain.In other words,the supplier provides the retailer with a certain delay in payment time.Meanwhile,the retailer also provides the consumer with a certain delay in payment time to stimulate consumption;(2)The retailers provide consumers with delayed payment time,which will not only increase the sales volume,but also increase the retailer's own opportunity cost and default risk;(3)This paper considers the goods as thedeteriorating itemswhose volume will continue to decrease during the inventory;(4)Consumers'demand is a function of the retail price.The supply chain model under the two-leveltrade credit generally only considers the retailer's maximum profit or the lowest cost,but there are various suppliers and retailers in the current market to cooperate to achieve the maximum profit together.So this paper not only considers the retailer's profit.The optimal profit of the supplier will also be taken into account in the model,and finally it will prove thatthe existenceof the retailer's optimal replenishment time and the retail price,which can provide a decision-making basis for the company through numerical simulation.The supplier-retailer models in this paperare divided into two types.Model 1 treats the supplier and retailer's revenue as a whole to establishes the supply chain profit model,and finallydetermines the optimal replenishment time to achieve maximum profit;Model 2 expands Model 1.Under this condition,the supplier will provide the retailer with a certain discount when they cooperate together.Then the paperwill discuss the changes in supply chain profits in the event of discounts.This paper proves that when a supplier and a retailer cooperate,the retailer's optimal replenishment time andoptimal retail price exist and the supplier's optimal production time exist too.When the supplier providesthe retailer with certain price discounts,the profit of the entire supply chain will be increased.In real life,suppliers and retailers can make decisions through numerical simulation by determining the values of other parameters so as to maximize profit and apply the model to the actual economic market.