Abstract—In this paper, an integrated supply chain model with credit-linked procurement cost is established. The main contribution of this paper are as follows: (1) n ( n is the number of shipments from supplier to retailer per production run, T is the replenishment time interval of the retailer and M is the credit period offered by the supplier), T and M all are decision variables. (2) Credit-linked procurement cost, i.e., the longer the credit period the higher the procurement cost. (3)The supplier grants the retailer upstream trade credit. Then, both cases of T ≥ M and T< M are discussed thoroughly. Time horizon is considered to be infinite. Theoretical results are obtained and an easy-to-use algorithm is designed to investigate the optimal solutions. Finally, numerical examples are presented to illustrate the results. Sensitivity analysis with respect to critical parameters is also given and some managerial insights are gained.