Joint pricing and inventory management for growing items in a supply chain under trade credit

This study investigates the overlooked area of growing items through a two-echelon supply chain with a hybrid-price-stock-dependent demand under trade credit policy. A supplier–retailer scenario is studied where the supplier breeds newborn animals with respect to a biological growth pattern and then slaughters them. The items are sent to the retailer where experiencing deterioration during the inventory cycle. The demand in the retail end is assumed to be multivariate function of unit selling price and the level of on-hand inventory. The model is analyzed under decentralized and centralized chain structures. An analytic solution approach and an algorithm are developed to solve the problem. The proposed structure is illustrated through experimental results with factual growth patent. Sensitivity analysis and graphical illustrations are carried out to investigate the impact of different input parameters. The results support the claim that centralized chain structure can provide the partners with more benefits if an appropriate coordination mechanism is applied. Moreover, it is shown that the unit purchasing cost of each echelon has a significant effect on the profit in comparison with the other cost factors. Finally, the results reveal that the supplier’s inventory cycle is more dependent on the growth pattern rather than external cost factors which is the basic insight of this study.