Journal of Applied Sciences1812-56541812-5662Asian Network for Scientific Information10.3923/jas.2006.406.410LaiChih-SungYung-Fu HuangHung-Fu Huang2200662In 1996, Khouja and Mehrez investigated the effect of supplier credit policies depending on the order quantity. The authors assumed that the supplier offers the retailer fully permissible delay in payments if the retailer ordered a sufficient quantity. Otherwise, permissible delay in payments would not be permitted. However, in this article, we want to extend this case by assuming that the supplier would offer the retailer partially permissible delay in payments when the retailer ordered a sufficient quantity. Otherwise, permissible delay in payments would not be permitted. Then, we model the retailer`s inventory system and develop three theorems to efficiently determine the optimal lot-sizing decisions for the retailer.]]>Goyal, S.K., 1985Khouja, M. and A. Mehrez, 1996Chang, C.T., L.Y. Ouyang and J.T. Teng,2003Chung, K.J. and J.J. Liao,2004Chang, C.T.,2004Chung, K.J., S.K. Goyal and Y.F. Huang,2005Chang, H.J. and C.Y. Dye,2005