Collaborative Financing Strategy for Supplier and Manufacturer

Feng Yang, Xiaolong Guo and Yugang Yu
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Feng Yang: University of Science and Technology of China
Xiaolong Guo: University of Science and Technology of China
Yugang Yu: University of Science and Technology of China

Chapter Chapter 13 in Intelligent Logistics Management in Digital Economy, 2025, pp 255-272 from Springer

Abstract: Abstract Debt-shared bank financing allows the supplier to share the retailer’s bank loan obligation, including principal and interest. We study the operational and financial decisions of a chain with a supplier selling to a capital-constrained retailer via a debt-shared contract. We derive the equilibrium debt-shared coefficient, wholesale price, order quantity, and bank’s interest rate with the retailer in different wealth regions. The very poor retailer always accepts debt-sharing and earns a profit, even if the supplier sets the wholesale price up to the retail price. The medium poor retailer might enter a supplier’s debt-sharing hole (a retailer’s wealth region) and acquire zero profit, by using debt-sharing with a wholesale price up to the retail price. For the medium poor retailer outside the hole or the medium rich retailer, the supplier offers either an optimal debt-shared bank financing contract or an optimal price-only contract at her benefit, mainly depending on the production cost and the retailer’s capital. This financing scheme improves both supplier profit and supply chain efficiency.

Date: 2025
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DOI: 10.1007/978-981-95-2177-7_13

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