| Abstract: | Under partial trade credit, suppliers usually require retailers to pay a fraction of the purchase cost immediately when ordering and the remaining payment is deferred at the end of the sales period. Considering a supply chain consisting of a risk-neutral supplier and multiple loss-averse retailers, we develop models under partial trade credit. We analyze the optimal decisions of a supplier and retailers under decentralized decision-making. The study shows that there is a unique Nash equilibrium among the retailers, and the optimal total order quantity of retailers increases as the delayed payment ratio increases and as the degree of retailers' competition increases, but decreases with an increase in the loss aversion. Numerical studies are conducted to demonstrate the solution procedures and the effects of the parameters on decisions and profits. |
