Research On Retailer’s Ordering Decision Under Credit Rating With Stochastic Demand Influenced By Sales Effort

Good cooperation between members of the supply chain system plays a vital role in improving the efficiency of the supply chain.In practice,it is common that an upstream supplier can offer various forms of discount to her high credit rating downstream retailers,such as wholesale price discount,quantity discount,trade credit and so on.This paper studies the optimal ordering quantities of the retailer in a two level supply chain with a supplier and a retailer under different credit rating schemes facing stochastic demand influenced by his sales effort.The credit rating schemes are divided into two cases : credit level is updated simultaneously;credit level is updated after a period which means the ordering information is postponed.Different from the traditional literature,we assume in this paper that the supplier can rate her retailers’ credit level by their order quantities.Retailer can have the opportunity to influence his credit rating level by the sales effort on his customers,that is,the higher order quantity could induce his supplier to raise his credit up to the so-called vip customer.In the former credit rating scheme,we show the structure of the optimal policies and discuss the relationship between the optimal ordering and the sales effort.We show that the retailer’s profit increases by the initial working capital level.In addition,the retailer’s ordering policy is not only up to his initial capital level,but also by the sales effort cost.The retailer should negotiate with the supplier for a suitable ordering quantity threshold contract.For the latter scheme,the paper also has such a series discussions through two periodic model.The results point out that the retailer should work harder to improve his credit level aiming at maximizing cash flow.Based on the two period model,this paper extends it to multi-periods model and analyzes the new model by numerical research.