Super-lite Laptop Company currently have a credit policy of 7 days. This
has been opposed by the distributors in the light of increased invoicing of 3 to 5 months of excess stock by the company. The excess stocks are not distributed uniformly to all the distributors. A revised credit norm could be to give an attractive 4% discount on advance payment only on the excess stock and link the number of days of credit policy with the excess stock that each distributor receives. Proposed credit policy could be For 1 month of excess inventory increase the credit policy to 10 days For 2 month of excess inventory increase the credit policy to 13 days For 3 to 5 month of excess inventory increase the credit policy to 16 days.