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

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). The authors 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. They find that there exists a region where TCF outperforms PCG for both players. Finally, they extend the model to the case in which both players are risk-averse and obtain similar results.


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  • Accession Number: 01679955
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 8 2018 3:03PM