Financing an online newsvendor with considering the impact of advertising strategy

Gongbing Bi, Yinghui Liu and Pingfan Wang

International Journal of Production Research, 2024, vol. 62, issue 19, 7205-7225

Abstract: This study examines the relationship between advertising and financing decisions in an online supply chain consisting of an e-platform and a capital-constrained retailer. The e-platform is the leader in a Stackelberg game, and the interaction is modelled in two advertising scenarios. The results indicate that advertising can reduce risk and is always beneficial, with an e-platform willing to support the retailer only when the former decides on the advertising level. When providing both advertising and financing services, the e-platform gains the ability to directly regulate the retailer's ordering decisions, thereby increasing its strategic flexibility.

Date: 2024
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DOI: 10.1080/00207543.2024.2321609

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