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Mathematical Problems in Engineering
Volume 2014, Article ID 327131, 9 pages
http://dx.doi.org/10.1155/2014/327131
Research Article

Optimal Inventory Policy under Permissible Payment Delay in Fashion Supply Chains

1School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China
2Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China
3School of Business Administration, Hunan University, Changsha 410082, China

Received 11 February 2014; Accepted 2 April 2014; Published 8 May 2014

Academic Editor: Xiaohang Yue

Copyright © 2014 Guo Li et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper investigates a retailer’s optimal inventory cycle and the corresponding time of payment in fashion supply chains where a supplier allows the payment delay. Here according to the established model we first analyze the retailer's reaction, and then find out the retailer’s optimal inventory policy and time of payment to maximize its total profit. Our result shows that it is not always the best choice for retailers of fashion supply chains to choose the discount way to replenish stocks, but the retailer can decide the optimal credit period and inventory cycle. Moreover, numerical examples are provided to illustrate the model’s feasibility and rationality.