Abstract: The main purpose of this study is to investigate the retailer’s inventory policy under two-level delay permitted to reflect the supply chain management situation. In this study, we assume that the retailer maintains a powerful position. So, it is assumed that the retailer can obtain the full trade credit offered by the supplier yet the retailer just offers the partial trade credit to his customers. Under these conditions, the retailer can obtain the most benefits. Then, an algebraic approach is provided to investigate the retailer’s inventory system as a cost minimization problem to determine the retailer’s optimal inventory policy under the supply chain management. One ease-to-use theorem is developed to efficiently determine the optimal inventory policy for the retailer. Finally, numerical examples are given to illustrate the theorem.