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.
Keywords: Capital-constrained retailer, financing service, bank credit, rebate contract, supply chain finance
@article{RO_2021__55_S1_S811_0,
author = {Zhan, Jizhou},
title = {A financing model with rebate contract in a capital-constrained supply chain},
journal = {RAIRO. Operations Research},
pages = {S811--S836},
year = {2021},
publisher = {EDP-Sciences},
volume = {55},
doi = {10.1051/ro/2020020},
mrnumber = {4223112},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2020020/}
}
TY - JOUR AU - Zhan, Jizhou TI - A financing model with rebate contract in a capital-constrained supply chain JO - RAIRO. Operations Research PY - 2021 SP - S811 EP - S836 VL - 55 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2020020/ DO - 10.1051/ro/2020020 LA - en ID - RO_2021__55_S1_S811_0 ER -
Zhan, Jizhou. A financing model with rebate contract in a capital-constrained supply chain. RAIRO. Operations Research, Tome 55 (2021), pp. S811-S836. doi: 10.1051/ro/2020020
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