Retailer's optimal ordering and discounting policies under advance sales discount and trade credits

Providing advance sales discount program to attract consumers or eliminate demand uncertainty is commonly in today's business, such as music disk, apparel, books, etc. Also, trade credit is a popular payment behavior in B2B and B2C transactions. In this research, we use EOQ to model the decisions under advance sales discount and two-echelon trade credits, which involve how much to order and how much to discount to minimize the total related cost. Several examples are given to illustrate the solution procedures and discuss the impact of various system parameters. We conclude with a computational analysis that leads to variety of managerial insights.

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