Selection of financing strategies with a risk-averse supplier in a capital-constrained supply chain

Li, Bo, An, Si-min and Song, Dong-ping (2018) Selection of financing strategies with a risk-averse supplier in a capital-constrained supply chain. TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW, 118. pp. 163-183.

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Abstract

This paper investigates a supply chain where the retailer is capital-constrained and the supplier is risk-averse. The supplier's risk-averse behavior is gauged by Conditional Value-at-Risk method under two financing strategies: partial credit guarantee(PCG) and trade credit financing(TCF). We obtain the equilibrium solutions and characterize the preference of two financing strategies by the switching curves in two-dimensional space of credit guarantee coefficient and risk aversion degree. We find that there exists a region where TCF outperforms PCG for both players. Finally, we extend the model to the case in which both players are risk-averse and obtain similar results.

Item Type:	Article
Uncontrolled Keywords:	Supply chain management, Financing strategy, Trade credit, Risk aversion, Game theory
Depositing User:	Symplectic Admin
Date Deposited:	03 Sep 2018 09:46
Last Modified:	19 Jan 2023 01:25
DOI:	10.1016/j.tre.2018.06.007
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3025849