Retailer's replenishment policy under supplier credit linked to payment time

In this paper, we investigate the problem of determining a retailer's optimal cycle time and the optimal payment policy when supplier offers partially or fully permissible delay in payment linking to payment time. The retailer can obtain the larger fraction of the delay payment permitted by the supplier when the retailer chooses the shorter delayed payment period. The supplier uses this policy to attract retailer to pay the payment as soon as possible to shorten the collection period. Mathematical models have been developed for obtaining the optimal cycle time and optimal payment policy for an item under such conditions. Finally, numerical examples are used to illustrate this result and obtain a lot of managerial insights.