Cooperation Modes of Operations and Financing in a Low-Carbon Supply Chain

Yang, Lei; Chen, Yufan; Ji, Jingna

doi:10.3390/su10030821

Cited by 19 publications

(28 citation statements)

References 40 publications

(21 reference statements)

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“…Jing et al [37], Cai et al [38], and Kouvelis and Zhao [39] found that firms' financing mode selection decisions are determined by factors such as production cost, capital market competition degree, and enterprise credit rating, respectively. Yang et al [40] compared delay-in-payment and supply chain carbon finance; they found that a supply chain carbon finance pattern can help increase the emission-reduction rate of the whole supply chain. As we can see, most studies on supply chain finance are primarily aimed at the traditional supply chain, with little research on the impact of capital constraint on the low-carbon supply chain.…”

Section: Capital-constrained Supply Chainmentioning

confidence: 99%

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Optimal Operation Strategies under a Carbon Cap-and-Trade Mechanism: A Capital-Constrained Supply Chain Incorporating Risk Aversion

Liu

Jiang

et al. 2020

Mathematical Problems in Engineering

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Many small and medium enterprises (SMEs) with capital constraints often have no access or find it costly to obtain a loan from a bank; the retailer tends to borrow money from other enterprises in the supply chain by trade credit financing. We consider an emission-dependent supply chain with one emission-dependent manufacturer and one capital-constrained retailer in need of financing to explore the optimal operational and environmental strategies of a low-carbon supply chain under trade credit financing. We use a Stackelberg game model to depict the low-carbon supply chain. We analyse the optimal carbon-emission reduction effort, wholesale price, and order quantity in the equilibrium state. The impacts of key parameters, such as the retailer’s internal working capital, the manufacturer’s risk-aversion degree, and the carbon-trading price on the supply chain operation, are analysed. The results show that the retailer’s capital constraint causes the carbon-emission reduction effort, wholesale price, and order quantity to improve synchronously. The supply chain achieves a win-win outcome for both the manufacturer and the retailer when the capital-constrained retailer is funded via trade credit from the manufacturer. The in-depth development of financing is beneficial to the manufacturer but is a disadvantage for the retailer. When the initial carbon-emission quota is low, the manufacturer benefits from a relatively lower carbon-trading price. Otherwise, a higher carbon-trading price is better for the manufacturer. The “carbon-trading price trap” ensures that the retailer’s profit is minimal. We further investigate the scenario in which the manufacturer is risk averse and find that the retailer will purchase fewer products and that the manufacturer will gain less profit to decrease the carbon-emission reduction effort. The manufacturer’s risk aversion is unfavourable to both the economic and environmental outcomes of the whole supply chain. This research provides strategic support for a low-carbon supply chain to carry out operational decisions in the context of enterprise capital constraint. To examine the theoretical results, the data used in the existing literature are further used to simulate the corresponding conclusions. Our research enriches the existing supply chain finance literature and provides decision support for the supply chain core enterprise.

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Section: Capital-constrained Supply Chainmentioning

confidence: 99%

“…As climate change has become more visible in recent years, SMEs are starting to feel greater regulatory and social pressure to adopt environmental strategies [40]. Enterprises' capital flow seriously affects their operation and management.…”

Section: Conclusion and Remarksmentioning

confidence: 99%

Optimal Operation Strategies under a Carbon Cap-and-Trade Mechanism: A Capital-Constrained Supply Chain Incorporating Risk Aversion

Liu

Jiang

et al. 2020

Mathematical Problems in Engineering

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“…Based on a fuzzy multi-criteria evaluation method combined with Topsis, Liang et al [36] propose a new SME financing evaluation model. Yang et al [37] develop four models on the basis of two cooperation models to discuss the firm's carbon emission reduction decisions. They find that compare with other modes, the SCCF pattern can not only increase member's profits, but also achieve effectively control the total carbon emissions.…”

Section: Integrated Management Of Operation and Financementioning

confidence: 99%

Research on Operation and Financing Strategy of an Emission-Dependent Supply Chain under Variable Transportation Fee Strategy

Zhang

Yao

2019

Sustainability

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Under the carbon cap-and-trade mechanism, we consider an emission-dependent supply chain consisting of a supplier, a manufacturer, and a 3PL firm that adopts variable transportation fee strategy. Five models on the basis of the supplier and manufacturer with or without capital constraints are considered to discuss members’ optimal decisions. The insights are obtained as follows. First, the ordering quantity under 3PL financing service is larger than that under two firms are well-funded when the transportation fee or carbon emission is less than a certain constant. The variable transportation fee strategy and members’ carbon emission reduction behavior are beneficial to each supply chain participant. Second, the carbon emissions of members decide whose capital constraint is more beneficial to 3PL firm, and 3PL prefers to cooperate with a medium rich manufacturer (rich supplier). Third, the external financing modes are analyzed to get the 3PL financing service can create new value for the manufacturer and 3PL if the transportation fee is below a threshold, and this threshold increases with the manufacturer’s carbon emission. When the transportation fee is larger than a threshold, a capital-constrained supplier will choose bank financing, and this threshold decreases with the supplier’s carbon emission. Finally, we demonstrate that the manufacturer’s loss aversion (carbon cap) can increase (decrease) its bankruptcy threshold.

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“…Besides the literature in Section 2.3, our study further fills this gap. Unlike in previous work [38,39], we concentrate on bank credit financing. The second contribution in this study is the innovation of coordinating mechanism.…”

Section: Low Carbon Supply Chain With Capitalmentioning

confidence: 99%

“…They did not consider the low carbon policies and emission reduction target. By contrast, in a capand-trade policy, Cao and Yu [38] concentrated on trade credit financing, whereas Yang et al [39] focused on carbon financing. The former found that the manufacturer prefers to cooperate with a medium rich retailer, and a general coordinating contract (including revenue sharing, buy back, and quantity discount) can coordinate the supply chain.…”

Section: Low Carbon Supply Chain With Capitalmentioning

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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Cooperation Modes of Operations and Financing in a Low-Carbon Supply Chain

Cited by 19 publications

References 40 publications

Optimal Operation Strategies under a Carbon Cap-and-Trade Mechanism: A Capital-Constrained Supply Chain Incorporating Risk Aversion

Optimal Operation Strategies under a Carbon Cap-and-Trade Mechanism: A Capital-Constrained Supply Chain Incorporating Risk Aversion

Research on Operation and Financing Strategy of an Emission-Dependent Supply Chain under Variable Transportation Fee Strategy

Low Carbon Distribution Channel Coordination with a Capital-Constrained Retailer

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