Abstract: Trade credit risk has gradually become a research hotspot in the field of the supply chain decision-making. The paper takes the retailer's ordering strategy with two-level trade credit as the research object where the retailer provides partial trade credit to the end-customers under the credit risk of some customers in the market. In this study, we assumes that the bad credit customers have a default risk associated with the credit period, and the demand is function of trade credit amount and customers' trade credit period and the increasing demand coefficient. Based on the theoretical framework of the economic ordering model, the paper studies an ordering policy with two-level trade credit under partial customers credit risk. Finally, an analysis of numerical example is given. The results show that in this context, the larger the proportion of bad credit customers, the greater the loss of retailers. Besides, the credit period and trade credit amount have positive and negative effects on the retailer's profit, which is largely affected by the increasing demand coefficient.

Key words: trade credit, credit risk, permissible delay in payments, ordering policy, bad credit customers