Research on Trade Credit Contract with the Fluctuation of Manufacturer's Purchase Price

This paper considers a credit system composed of a manufacturer and a retailer. Consider the fluctuation of raw material prices of manufacturer, the optimal decision-making of manufacturer and retailer in the supply chain under the exponential pricing contract is studied by adopting the exponential pricing strategy. The change law of the optimal order quantity and the optimal pricing with the proportion index is given. It is found that the optimal order quantity decreases with the price, and the relationship between the optimal order quantity and the proportion index is related to the current price and the expected price; the manufacturer's profit is a concave function about the proportion index, and the conditions for the optimal proportion index are given. Finally, the theoretical results are verified and extended by numerical examples.