Volume 55, 2021Regular articles published in advance of the transition of the journal to Subscribe to Open (S2O). Free supplement sponsored by the Fonds National pour la Science Ouverte
|Page(s)||S811 - S836|
|Published online||02 March 2021|
A financing model with rebate contract in a capital-constrained supply chain
School of Business, Nanjing Audit University, Nanjing 211815, P.R. China
* Corresponding author: firstname.lastname@example.org
Accepted: 19 February 2020
In a two-level supply chain that includes one supplier and one capital-constrained retailer, this paper investigates a new bank financing model (Model N), in which, the supplier requires the retailer to order a quantity that is not less than a specified minimum ordering quantity (MOQ), rebates the per unit excess that sells over the MOQ, and promises to provide a partial warranty for the bank credit risk if the revenue is below the bankruptcy level of the retailer with the MOQ. This study shows that retailer’s optimal order quantity increases with MOQ level and decreases with rebate rate, while supplier’s optimal wholesale price shows an opposite tendency. Compared to the traditional bank financing model (Model T), the model N with an appropriate rebate contract will result in a larger order quantity of retailer. Furthermore, model N would benefit the entire supply chain and a Pareto zone of MOQ (or rebate rate) exists, in which, model N outperforms model T for each player. The numerical experiments are performed to illustrate that with increasing the marginal production cost of supplier, the MOQ level is decreasing while rebate rate is increasing in the Pareto zone.
Mathematics Subject Classification: 90B06
Key words: Capital-constrained retailer / financing service / bank credit / rebate contract / supply chain finance
© EDP Sciences, ROADEF, SMAI 2021
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