Practically,　two-level　trade　credit　is　usually　applied　to　stimulate　the　retailer＇s　order　incentive　for　deteriorating　items　with　expiration　date.　Nevertheless,　previous　studies　ignore　to　identify　both　quantity　loss　and　quality　loss　derived　from　expiration　date,　and　lack　of　examining　whether　these　joint　losses　impact　effectiveness　of　two-level　trade　credit.　Thus,　this　paper　firstly　builds　an　inventory　model　for　deteriorating　items　with　expiration　date,　which　accurately　determines　the　retailer＇s　optimal　response　when　involving　both　quantity　and　quality　losses.　(1)　For　given　expiration　date,　this　paper　identifies　the　phenomenon　of　limit　effect　and　its　occurred　conditions,　referring　that　the　retailer＇s　optimal　order　cycle　for　deteriorating　items　equals　its　expiration　date;　(2)　this　paper　validates　the　scope　of　limit　effect,　below　which　deteriorating　items　should　be　optimally　replenished　with　its　expiration　date.　In　addition,　two-level　trade　credit　is　further　incorporated　into　deteriorating　items,　resulting　in　two　types　of　expiration　date　scenarios　including　lower　and　higher.　Specifically,　for　the　given　expiration　date,　upstream　credit　period　can　affect　the　retailer＇s　selection　of　operational　policies,　and　the　occurrence　of　limit　effect.　And　along　with　the　increase　of　expiration　date,　more　operational　policies　can　be　assumed　by　the　retailer.