Optimal order quantity of retailer with quadratic ramp-type demand under supplier trade credit financing

摘要

This paper discusses the optimal ordering decision of the retailer influenced by the credit policy of the supplier under quadratic ramp-type demand. Based on the demand transfer point, four different models are proposed and their respective conditions for the existence and uniqueness of optimal solutions are verified. It is analytically established that the ordering decision of the retailer is greatly influenced by the trade credit period offered by the supplier under quadratic ramp-type demand. By comparing unit profit functions obtained under four different models, it is found that the preferable replenishment policy is always strictly determinable. The results are illustrated by numerical examples, and sensitivity analysis is also carried out.