In today’s business transaction, most sellers usually offer their buyers a delay period in payment to stimulate sales and encourage consumption. In a manufacturer-retailer channel, the manufacturer provides an upstream credit period to his/her retailer, while the retailer offers his/her customers a downstream credit period. This study will discuss that the influences of trade credit on the ordering policy of retailer in manufacturer-retailer chain. In this project, we assume that the manufacturer products multiple items and delivers the products to the retailer, as well as, the total storage capacity for all items is fixed. Based on the previous assumptions, this project establishes new mathematical models to find the optimal ordering policy which maximizes the profit of retailer. The numerical examples are provided to illustrate the solution procedure.
