Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives

Trade credit is a crucial source of capital particularly for small businesses with limited financing opportunities. Inventory models considering trade have been widely studied. However, while there extensive research on the single-vendor single-buyer inventory model allowing delays in payments, systems where vendor supplies to more than one buyer received less attention. In this paper, we analyze two-echelon system single an item two buyers who face constant deterministic demand. The produces items at finite rate and offers delay payment period. That is, can purchased until end Therefore, during such period, sell use sales revenue earn interest. At should pay purchasing cost which external funding may be necessary. It accepted that, general, centralized policies reduce total supply chain. first deal integrated assuming that make decisions jointly. some cases, are not willing collaborate, management chain has carried out decentralized manner. Hence, also address problem under non-cooperative setting. Numerical examples presented illustrate both models. Additionally, perform computational experiment compare strategies, sensitivity analysis parameters out. From results, derived it was profitable follow policy excepting when replenishment costs were high. Finally, order validate statistical performed.