Volume 56, Number 3, May-June 2022
|Page(s)||1223 - 1258|
|Published online||17 May 2022|
Mixed financing modes for capital-constrained supply chain with risk-averse members
School of Marketing and Logistics Management, Nanjing University of Finance and Economics, Nanjing, Jiangsu 210023, P.R. China
2 School of Business Administration, Hunan University, Changsha, Hunan 410082, P.R. China
3 School of Information and Mathematics, Yangtze University, Jingzhou, Hubei 434023, P.R. China
* Corresponding author: email@example.com
Accepted: 16 April 2022
This paper considers a two-echelon supply chain consisting of a supplier and a capital-constrained retailer. Both the supplier and the retailer are risk-averse decision makers. The capital-constrained retailer may adopt two mixed financing modes: (1) bank credit and equity financing (BEF) and (2) trade credit and equity financing (TEF). Using a mean-variance framework, we analyze the supply chain members financing and ordering decisions in two cases: symmetric and asymmetric retailer risk aversion threshold information. In the case of symmetric information, we characterize the conditions under which both the supplier and the retailer prefer BEF or TEF. In the case of asymmetric information, we demonstrate that the retailer has an incentive to pretend to be less risk averse. To prevent this distortion behavior, we design a minimum quantity contract for the supplier. Finally, we extend our model to a bank loan-trade credit-equity mixed financing mode (BTEF) in which the retailer can borrow from the bank and the supplier and seeks financial support from investors. The numerical simulations support our results.
Mathematics Subject Classification: 35J20 / 35J25 / 35J60
Key words: Capital constraint / bank credit / trade credit / equity financing / risk constraint
© The authors. Published by EDP Sciences, ROADEF, SMAI 2022
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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