A model of trade credit in a capital-constrained distribution channel

Chen, Xiangfeng

doi:10.1016/j.ijpe.2014.05.001

Cited by 213 publications

(144 citation statements)

References 36 publications

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“…Cai et al [35] studied how capital-constrained retailers make a choice between bank credit and transaction credit and verified the results through empirical research. Chen [19] investigated a supply chain with a manufacturer and a capitalconstrained retailer, and two ways of borrowing, from the bank or from the manufacturer, were discussed. Finally, a revenue-sharing contract was introduced to coordinate the supply chain.…”

Section: The Retailer's Capital Constraintsmentioning

confidence: 99%

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Research on Pricing and Coordination Strategy of a Sustainable Green Supply Chain with a Capital‐Constrained Retailer

Li-ming

Yao

et al. 2018

Complexity

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With the gradual deepening of environmental problems and the increase in consumer awareness of environmental protection, many enterprises have already begun to pay attention to green supply chain management. However, the price of green products is higher than that of nongreen products, which is an enormous challenge for many small-or medium-sized enterprises. To study the pricing and coordination of green supply chains under capital constraints, a model consisting of a manufacturer and a capital-constrained retailer is established; the manufacturer invests in green products and provides a deferred payment contract. Setting the situation without capital constraints as a benchmark, this study explores the impact of the retailer's capital constraints on the manufacturer's product greenness design; an interesting result shows that deferred payment can help encourage the retailer to order more products and improve the profit of the manufacturer and the efficiency of the entire supply chain as well as the product's greenness level simultaneously. However, the profit of the retailer will be hurt by the deferred payment contract. Therefore, to guarantee the profit of the entire channel and to make the two agents obtain a win-win outcome, a new two-way revenue-sharing contract is designed to coordinate the green supply chain.

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Section: The Retailer's Capital Constraintsmentioning

confidence: 99%

“…In the Boeing 787 Dreamliner programme, a risk-sharing contract is signed with the company's strategic suppliers. Under this contract, Boeing does not need to make payment before airplanes are delivered to customers [19].…”

Section: Introductionmentioning

confidence: 99%

Research on Pricing and Coordination Strategy of a Sustainable Green Supply Chain with a Capital‐Constrained Retailer

Li-ming

Yao

et al. 2018

Complexity

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“…Jing et al [18] compared the efficiency between bank credit financing and trade credit financing for a capital-constrained retailer and found that trade credit financing becomes highly effective when production cost is relatively low. Chen [19] further studied the coordination problem in the supply chain. Bank versus trade credit is compared under revenue sharing contract, and the results show that channel coordination can create more profit for both channel members.…”

Section: Interface Of Operations and Financing Decisionsmentioning

confidence: 99%

Low Carbon Distribution Channel Coordination with a Capital-Constrained Retailer

Wang

Cheng

Zhang

2018

Discrete Dynamics in Nature and Society

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Capital constraints exist in many supply chains. We examine a low carbon distribution channel that consists of a manufacturer and a retailer, in which the retailer is constrained by capital. The retailer can be financed by bank credit from a competitive bank market. A Stackelberg model is developed to analyze the integrated decision-making process of ordering, financing, and emission reduction. By comparing the decentralized and centralized channels, we obtain that the manufacturer's green technology investment should be linearly proportional to the retailer's order quantity in both channels. Thus, a large order quantity leads to increased efforts to reduce emissions. Results further show that the centralized channel in some cases has fewer emissions and can generate more profits for the whole supply chain compared with the decentralized channel. We therefore propose a revenue sharing contract with a function form to coordinate the distribution channel. When the government allocates appropriate quotas to the supply chain, high carbon price can benefit the environment and supply chain efficiency.

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“…Following the convention in some supply chain management literature (e.g., ), we assume that the retailer and the supplier have the same belief about the demand distribution. Similar to Wang and Luo and Li et al , the bank and the insurer is assumed to have the same belief about the demand distribution, which is reasonable because the bank and the insurer can share the borrower's risk information via the financial information sharing platform.…”

Section: Model Description and Assumptionmentioning

confidence: 99%

“…In this respect, Jing et al . , Kouvelis and Zhao , and Chen demonstrated that a capital‐constrained retailer's equilibrium financing strategy depended on some operational parameters such as production cost and capital level.…”

Section: Introductionmentioning

confidence: 99%

Optimal inventory and insurance decisions for a supply chain financing system with downside risk control

Jin

Luo

2016

Appl Stoch Models Bus & Ind

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This research considers a supply chain financing system consisting of a capital‐constrained retailer, a supplier and a risk‐averse bank. The retailer may be subject to credit limit because of the bank's downside risk control, and hence, credit insurance should be needed to enhance his financing ability. This paper develops a mathematical optimization model by incorporating insurance policy into the well‐known newsvendor financing model. The optimal inventory and insurance decisions under different scenarios, that is, no insurance, insurance with symmetric information and insurance with asymmetric information, are derived. This work also discusses how the retailer's capital level, the bank's risk aversion, and the insurer's loading factor affect the optimal inventory and insurance decisions. The results show that the retailer will use credit insurance if he is sufficiently capital‐constrained or the insurer's risk loading factor is low enough. Moreover, credit insurance can bring Pareto improvement to the supply chain financing system, which verifies the prevalence of credit insurance in practice. Several numerical experiments are presented to examine the sensitivities of key parameters. Copyright © 2016 John Wiley & Sons, Ltd.

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A model of trade credit in a capital-constrained distribution channel

Cited by 213 publications

References 36 publications

Research on Pricing and Coordination Strategy of a Sustainable Green Supply Chain with a Capital‐Constrained Retailer

Research on Pricing and Coordination Strategy of a Sustainable Green Supply Chain with a Capital‐Constrained Retailer

Low Carbon Distribution Channel Coordination with a Capital-Constrained Retailer

Optimal inventory and insurance decisions for a supply chain financing system with downside risk control

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