Optimal Delayed Payment Period And Price Decision In Supply Chain

In traditional business transactions,it is implicitly assumed that the retailer must pay immediately after the goods are received.However,in the fierce market competition,the cash flow of small and medium-sized enterprises is becoming tight,and the immediate payment is no longer applicable to the modern economy society.As the most commonly used tool of supply chain financing,delayed payment alleviates the capital flow of downstream businesses,promotes the sales of upstream enterprises,and transfers the responsibility and cost of storage to retailers.The related research of the delayed payment has gradually become a hot topic in the supply chain financing and inventory management.However,many scholars assume the payment delay period offered by supplier is given,they ignore the payment delay period is an important decision factor in supply chain.Therefore,how to determine the optimal delayed payment period is our key content.In this paper,we consider a two-echelon supply chain involving a supplier and a capital-constrained retailer in which the demand is the retail price and time dependent.We propose a decision model to determine the optimal delay period and pricing decisions under a non-cooperative Stackelberg game with the supplier as the leader.By maximizing the supplier's profit function,we obtain the analytical-form optimal solutions.Next,we extend the optimal credit periods in a two-echelon supply chain under the two-level trade credit.The upstream supplier may offer the downstream retailer trade credit,and the retailer in turn may offer the customer trade credit.It is assumed that the market demand is related to the retail price and the consumer's delayed payment period.We study non-cooperative equilibria of both the retailer's and customer's credit periods simultaneously with the supplier as the leader.Under single-level trade credit,we find the supplier predetermines the optimal delay period depending only on the interest rates and ordering cycle.Our analysis reveals the influence of the delay period on the wholesale and retail prices.Under two-level trade credit,the optimal delay period for retailer and customer is solved.We further find that the optimal retail price is a strictly decreasing function of the retailer's credit period when the customer does not receive credit period and increasing function when the customer receives credit period.Numerical simulation verifies the theoretical results.