Financing preferences and performance for an emission-dependent supply chain: Supplier vs. bank

Cao, Erbao; Du, Lingxia; Ruan, Junhu

doi:10.1016/j.ijpe.2018.08.001

Cited by 119 publications

(60 citation statements)

References 34 publications

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“…In one of the pioneering studies, Che and Gale [8] found that if the firms in the supply chain are capital constraint, it will influence the normal operation of the supply chain. Subsequently, many scholars begin to pay attention to the problems of financing and operational decisions in the capital-constrained supply chain and thus many relevant research literatures are constantly emerging [4,7,14,22,23,31].…”

Section: Shuai Huang Zhi-ping Fan and Xiaohuan Wangmentioning

confidence: 99%

Optimal financing and operational decisions of capital-constrained manufacturer under green credit and subsidy

Huang¹,

Fan²,

Wang³

2021

Journal of Industrial &Amp; Management Optimization

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To stimulate the capital-constrained manufacturer to produce green products, the government often adopts two incentive mechanisms: green credit (i.e., subsidy offered directly to bank) and subsidy (i.e., subsidy offered directly to manufacturer). This paper examines the optimal interest rate of the bank, and the optimal product green degree and sales price of the manufacturer under the two mechanisms, respectively. Furthermore, we investigate the effects of these mechanisms on the optimal decisions, the profits of players, the social welfare and the environmental benefits. Several important results are obtained. First, when the total government subsidy is low, the green credit mechanism can bring the higher green degree, product sales price and demand, as well as higher profits for the bank and manufacturer, rather than the subsidy mechanism. Otherwise, the result is opposite. Second, the government should adopt the green credit mechanism to support the manufacturer to develop green products when the budget is limited and relatively low. If the government budget is sufficient, the subsidy mechanism is the best choice, which can bring higher economic and environmental benefits.

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Section: Shuai Huang Zhi-ping Fan and Xiaohuan Wangmentioning

confidence: 99%

Optimal financing and operational decisions of capital-constrained manufacturer under green credit and subsidy

Huang¹,

Fan²,

Wang³

2021

Journal of Industrial &Amp; Management Optimization

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“…Wu et al (2019a) examined the financing decisions considering carbon emission reduction decision, and found that the trade credit financing is more efficient. Cao et al (2019) investigated the financing preferences with uncertain demand and low-carbon preference, finding that trade credit is better for the manufacturer regardless of whether to invest in carbon emission reduction. Shen et al (2019) assumed that the manufacturer with capital constraints can borrow from banks or retailers.…”

Section: Literaturementioning

confidence: 99%

“…Cao et al. (2019) investigated the financing preferences with uncertain demand and low‐carbon preference, finding that trade credit is better for the manufacturer regardless of whether to invest in carbon emission reduction. Shen et al.…”

Section: Literaturementioning

confidence: 99%

Optimal channel strategies in a supply chain under green manufacturer financial distress with advance payment discount

Zhang

Wang

2020

Int Trans Operational Res

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Green manufacturers are always faced with capital constraints in reality, while the previous literature has shown that internal financing is more effective than external financing. Given manufacturers' financial constraints, this paper studies and compares the optimal green decisions and profits under single-channel or dual-channel strategies with and without green investment. Therefore, the main contribution of the paper is determining the optimal channel strategy of supply chains under advance payment financing. The results indicate that the retailer's optimal channel strategy is to provide advance payment financing to the manufacturer who introduces online channel and produces green products, which are beneficial to the economic and environmental performance. Besides, green investment can facilitate a win-win scenario if the price elasticity of the demand for the retail channel is smaller than a threshold. Furthermore, green investment increases the retailer's acceptance of online channel. The results of our research can provide decision support for decision makers under the advance payment financing.

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“…Cao et al. () consider a supply chain with one supplier and one capital‐constrained manufacturer that are in need of short‐term financing. As indicated in the State Council reports of China, SMEs’ finance troubles were highlighted.…”

Section: Literature Reviewmentioning

confidence: 99%

Influences of supply chain finance on the mass customization program: risk attitudes and cash flow shortage

Guo

Liu

2019

Int Trans Operational Res

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In recent years, to satisfy diversified customer needs in the target market, an increasing number of brands have launched mass customization (MC) programs as one of their core operations strategies. The production process flexibility and personalization degree of customized products (i.e., the MC products) have thus become key to the success of MC schemes. In the meantime, however, considering the high market uncertainty in consumer preferences and the challenges from the production process, there are plenty of risks in MC operations. Hence, in this paper we develop a game-theoretic model consisting of an MC brand and an upstream manufacturer to identify the influences of supply chain finance (SCF) on MC programs. The influences brought by the risk attitudes of both MC brand and manufacturer are analyzed. Besides, an extra interest rate for raising the working capital for production (e.g., from the bank) at the manufacturing level is also considered in this paper to address the impact of cash flow shortage. We find that when the positive sensitivity of the market demand with respect to the modularity level of the MC product is sufficiently high, the optimal product modularity level of the MC product increases with the MC brand's degree of risk averse. In addition, it can also be observed that when both the market demand's positive sensitivity to the modularity level of the MC product and the MC brand's opportunity cost rate for placing the advance order are sufficiently high, any increase in the risk-averse degree of the MC brand or the manufacturer will lower the manufacturer's optimal wholesale price of the MC product as well as the MC brand's optimal rate of the advance order. Furthermore, the higher the interest that the manufacturer needs to pay (such as to the bank) for raising the working capital for the MC production process, the lower the optimal wholesale price of each finished MC product will be to help the manufacturer raise more money through the advance order placed by the MC brand. These observations complete the findings in the extant literature and provide important managerial insights into managing MC operations.

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Financing preferences and performance for an emission-dependent supply chain: Supplier vs. bank

Cited by 119 publications

References 34 publications

Optimal financing and operational decisions of capital-constrained manufacturer under green credit and subsidy

Optimal financing and operational decisions of capital-constrained manufacturer under green credit and subsidy

Optimal channel strategies in a supply chain under green manufacturer financial distress with advance payment discount

Influences of supply chain finance on the mass customization program: risk attitudes and cash flow shortage

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