Supply chain management for two-level trade credit financing with selling price dependent demand under the effect of preservation technology

The present paper investigated the economic order quantity inventory model for a retailer under two-levels of trade credit to reflect the supply chain management (SCM). Here, it is assumed that the selling items are perishable such as fruits, fresh fishes, gasoline, photographic films, etc. It is assumed that potential worth of items can be increased by using preservation technology and the retailer’s trade credit period (M) offered by the supplier is longer than the customer’s trade credit period (N) offered by the retailer. It also assumed that the demand of the customer depends on the selling price of items. Theorems are developed to determine retailer’s optimal ordering policies and numerical examples are given to illustrate these theorems. It also observed that Goyal (1985), Shah (1993), Chung (1998) and Huang (2003) are the particular case of our proposed model. In addition, some managerial insights from the numerical examples are also concluded.