Credit Contract Selection and Wholesalers' Optimal Inventory Model under the Circumstances of Delay Payments

Abstract

It has demonstrated in previous studies that when the retailer confronted with the challenge of budget limitation or capital shortage, vendor financing could create value for the wholesalers and synchronize the supply chain at certain point as well. This paper discusses the relationship between the number of days delayed in payment and wholesale prices, wholesalers' order quantity, the initial capital (capacity to pay). And it studies the strategy selection of wholesalers on credit contract and the optimal inventory in large and medium size perishable item market under the circumstances of delay payment by retailers.