Joint logistics and financial services by a 3PL firm: Effects of risk preference and demand volatility

Fan Wang, Xiao Yang, Xiaopo Zhuo and Minghua Xiong

Transportation Research Part E: Logistics and Transportation Review, 2019, vol. 130, issue C, 312-328

Abstract: This paper considers a third-party logistics (3PL) firm that provides integrated logistics and financial services to a budget-constrained manufacturer with different risk preferences. We adopt a mean–standard deviation objective function to reflect different risk preferences and concentrate on the effects of risk preference and demand volatility. Interestingly, we discover that substitution and complementary effects exist between the interest and freight rates of the 3PL firm. The effects of risk preference and demand volatility on the equilibrium interest rate become more significant when supply chains engage in price competition. Furthermore, we demonstrate that the 3PL firm prefers a risk-averse manufacturer.

Keywords: Supply chain finance; Mean–standard deviation; Joint logistics and financial services; Risk preference; Demand volatility (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (27)

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DOI: 10.1016/j.tre.2019.09.006

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