The optimal supplier´s trade credit decisions in the EPQ model

The Trade credit policy design of suppiler has influenced the profits of the whole supply chain. This paper investigates the optimal supplier´s trade credit decisions under two levels of trade credit within the EPQ framework. Then the optimal unit price and the length of the credit period is provided for the supplier to maxmize his profits by analysing the profits functions of the retailer and the supplier. Finally, examples and numerical analysis are given to analyse the effect of the end demand and the interest rate on the the optimal unit price and the optimal credit period.