Abstract: This study tries to modify Huang and Chung to develop the retailer’s inventory model. We assume that the retailer can obtain the trade credit when the payment is paid within the trade credit period offered by the supplier. Otherwise, the retailer will just obtain a cash discount. In addition, we modify the assumption that the unit purchasing price and unit selling price were equal. Under these conditions, we want to investigate the retailer’s optimal ordering policy and optimal payment policy within the EOQ framework. Mathematical model has been derived for obtaining the optimal cycle time and optimal payment time for item so that the annual total relevant cost is minimized. Furthermore, numerical examples are given to illustrate the results developed in this study.