Comparative analysis of supply chain financing strategies between different financing modes

Nina Yan; Baowen Sun

doi:10.3934/jimo.2015.11.1073

Article Contents

2015, Volume 11, Issue 4: 1073-1087. Doi: 10.3934/jimo.2015.11.1073

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Comparative analysis of supply chain financing strategies between different financing modes

Nina Yan^1, and
Baowen Sun^1,

1.
Central University of Finance and Economics, Beijing 100081

Received: June 2013

Revised: September 2014

Published: October 2015

Abstract / Introduction Related Papers Cited by

Abstract

In the supply chain finance (SCF) system composed of a capital-constrained retailer, a manufacturer and a commercial bank, we design two different limited financing modes, namely, a financing mode based on order and on the capital-gap. Considering the retailer's capital constraint and bankruptcy risk, we formulate a Stackelberg game in which the manufacturer acts as the leader and analyze the optimal decisions for each participant. Finally, we conduct numerical examples and make comparative analyses between these two different financing modes in terms of optimal ordering and pricing decisions, as well as optimal expected profits. It is concluded that the optimal expected profit of SCF under either financing mode would be higher than that in the case of no capital constraint or capital-constrained without financing. Moreover, the financing mode based on order would encourage the manufacturer to earn more and the financing mode based on capital-gap would be more favorable to the retailer.

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Mathematics Subject Classification: Primary: 90B05; Secondary: 91A12.

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