| With the development of globalization and international competition, the budget constraint of firms becomes the important issue to have the impact on their jointly operational and financing decisions. Trade credit, a credit offered by the upstream supplier to the downstream retailer, is regarded as an important informal credit channel in the developing/developed economy, In USA, as a payment model, trade credit occupies more than 80% in the market of payment approaches. It is already referred to be the important resource of short-term loan. However, in the domestic literature, most people do not consider the trade credit as a financial channel but only as a marketing approach instead.This paper shows the background of trade credit, and put forwards that trade credit can effectively solve budget constraint through the analyses of optimal retailer's order model and supply chain return model. Through a critical evaluation of five values of trade credit, e.g. financing, liquidity, price discrimination, product differentiation and market power, we design customer credit and indicate how it works in specific areas to solve budget constraint in supply chain, and witness to enhance customer's satisfaction, promote marketing and create maximal profit finally based on the research of customer credit example in one Fortune 500 company used.In summary, this paper not only theoretically enriches supply chain management, but realistically explores new path for its development trend. |
