Managing default risk under trade credit: Who should implement Big-Data analytics in supply chains?

Yu-Chung Tsao

Transportation Research Part E: Logistics and Transportation Review, 2017, vol. 106, issue C, 276-293

Abstract: This paper considers a supplier–retailer channel in which providing trade credit to customers incurs default risk. Big-data analytics (BD-A) could be used to mitigate default risk. The aim is to identify the party that should implement BD-A in the supply chain. Our results indicate that when the retailer (supplier) is dominant in determining the credit period, the retailer (supplier) prefers to implement BD-A unilaterally if the optimal BD-A effort is higher than a threshold. The credit period, quantities ordered, and BD-A effort increase when BD-A effort cost is shared.

Keywords: Trade credit; Default risk; Supply chain; Big-Data analytics; Demand uncertainty (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (16)

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DOI: 10.1016/j.tre.2017.08.013

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