Buyer's optimal ordering policy and payment policy under supplier credit

This paper tries to incorporate both Chung and Huang (2003b) and Huang and Chung (2003) to develop the buyer’s inventory model. That is, we want to investigate the buyer’s optimal cycle time and optimal payment time under supplier’s trade credit policy and cash discount policy. Mathematical models have been derived for obtaining the optimal cycle time and optimal payment time for item under supplier’s trade credit and cash discount so that the annual total relevant cost is minimized. Furthermore, numerical examples are given to illustrate the results developed in this paper and we can also obtain a lot of managerial implications.