Mean-variance analysis of wholesale price contracts with a capital-constrained retailer: Trade credit financing vs. bank credit financing

Yang, Huijie; Zhuo, Wenyan; Shao, Lusheng; Talluri, Srinivas

doi:10.1016/j.ejor.2021.01.042

Cited by 48 publications

(37 citation statements)

References 48 publications

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“…Risk management has become increasingly important in today’s complex SCs (Yang et al 2021 ). More and more studies have emphasized the need to integrate risk management strategies into the company’s decision-making process.…”

Section: Literature Reviewmentioning

confidence: 99%

Green supply chain game model and contract design: risk neutrality vs. risk aversion

Cai

Huazhen

et al. 2022

Environ Sci Pollut Res

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This paper incorporates the players’ risk attitudes into a green supply chain (GSC) consisting of a supplier and a retailer. The supplier conducts production and determines the green level and wholesale price as a game leader; the retailer sells green products to consumers and determines the retail price as a follower. Equilibrium solutions are derived, and the influence of risk aversion on the GSC is examined. Our results show that, for the centralized GSC, risk aversion lowers the green level and the retail price, while for the decentralized GSC, risk aversion lowers the wholesale price and the retail price, but it may induce the supplier to increase the green level given a high-risk tolerance of the supplier. Meanwhile, the risk-averse decentralized GSC may obtain more expected profit than the risk-neutral decentralized GSC. Furthermore, this paper designs a revenue-and-cost-sharing joint contract to coordinate the risk-neutral GSC, and such a contract can improve the risk-averse GSC under specific conditions.

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Section: Literature Reviewmentioning

confidence: 99%

Green supply chain game model and contract design: risk neutrality vs. risk aversion

Cai

Huazhen

et al. 2022

Environ Sci Pollut Res

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“…There are two widely used types of financing a firm can accept: Bank Credit Financing (BCF) and Trade Credit Financing (TCF) [14,15]. The former refers to short-term financing provided by an external financier regarding the scope of a SC.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Now, by having the linear time-invariant model of the SC at hand, we will demonstrate how we can formulate the centralized constrained finite-time LQR for the SC network. Formulating the desired goals for each entity with the corresponding quadratic cost functions leads to Equation (15).…”

Section: Problem Formulationmentioning

confidence: 99%

“…By considering state and input vectors as in Equation ( 16), the state penalty matrix Q := diag g Mi , g Dib , g Dij , 0 and the input matrix penalty R := diag (g Ni , g Li ) result. Furthermore, P := diag g Mi , g Dib , g Dij , g Qi is equal to the final state penalty matrix in Equation (15), with "diag" denoting the diagonal matrix for corresponding cost coefficients. To acquire the input signals of entities in the SC network optimally using a centralized view, let us describe the network's total cost function as an accumulation of the separately allocated costs for each entity as follows:…”

Section: Problem Formulationmentioning

confidence: 99%

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A Convex Dynamic Approach for Globally Optimal Profit in Supply Chains

2022

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Supply chain finance aims to coordinate multiple stakeholders to maximize the flow of cash and internal and external funding along the supply chain, as shown in prior research. From a regulatory standpoint, the goal of this paper is to maximize the profitability of an entire supply chain. As a result, a constrained finite time Linear Quadratic Regulation (LQR) approach is provided for determining an entity’s optimal profit state in a supply chain. The framework is represented by discrete-time linear dynamical equations for each entity in the supply chain network, taking state and input variables into account. The problem is formulated in terms of a convex quadratic programming optimization for which several numerically efficient algorithms are readily available. In order to validate the approach, it was tested on two topologies. The first topology is a fully connected supply chain with six nodes; the second is a simple topology based on the Iranian pharmaceutical supply chain. The results indicate that the proposed approach successfully planned production and financing decisions within the simulated supply chain and obtained globally optimal profit for all supply chain stakeholders.

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“…Yang et al, (2019) considered that a retailer with scarce funds will order more products, while a wealthy retailer will do the opposite in a capital-constrained supply chain [8]. Yang et al, (2021) found that risk-averse suppliers and capital-constrained retailers could benefit from trade credit [31]. Wang et al, (2021) showed that a trade credit contract can replace the price contract in certain situations by comparing credit contracts with price contracts [32].…”

Section: Trade Creditmentioning

confidence: 99%

Trade Credit with Barter in a Capital-Constrained Supply Chain

Huang

Fang

2021

Sustainability

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Barter has emerged to alleviate capital pressure, maximize the circulation of goods, and facilitate the disposal of excess inventory. This study considers a two-level supply chain consisting of a manufacturer and a capital-constrained retailer with trade credit, in which the retailer exchanges unsold products for needed subsidiary products on a barter platform. The retailer’s optimal order quantity and the manufacturer’s wholesale price are derived, and the influences of barter and other factors on the equilibrium strategy and performance of the supply chain are examined; these results are verified and supplemented by numerical simulation. We find that the retailer can increase profit by bartering when facing highly uncertain demand, that the retailer’s optimal order quantity increases with the supply rate and demand for subsidiary products, and that both manufacturer and retailer benefit from the high supply rate of subsidiary products. However, barter induces the manufacturer to raise the wholesale price to prevent its profit from being harmed. In addition, the manufacturer suffers from the retailer’s initial capital.

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Mean-variance analysis of wholesale price contracts with a capital-constrained retailer: Trade credit financing vs. bank credit financing

Cited by 48 publications

References 48 publications

Green supply chain game model and contract design: risk neutrality vs. risk aversion

Green supply chain game model and contract design: risk neutrality vs. risk aversion

A Convex Dynamic Approach for Globally Optimal Profit in Supply Chains

Trade Credit with Barter in a Capital-Constrained Supply Chain

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