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Trade credit contract with limited liability in the supply chain with budget constraints

Xiangfeng Chen () and Anyu Wang ()

Annals of Operations Research, 2012, vol. 196, issue 1, 153-165

Abstract: The paper investigates the impacts of trade credit (i.e., open account payment) and limited liability on the performance of a two-level supply chain with budget constraints. It shows that limited liability accounts for the reason why the retailer with a lower initial budget initiates a higher ordering level under trade credit contract. Furthermore, this paper finds that trade credit contract could create value in a supply chain with budget constraints, and partly coordinate the supply chain. Copyright Springer Science+Business Media, LLC 2012

Keywords: Trade credit; Financing service; Budget constraints; Limited liability; Supply chain (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (35)

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DOI: 10.1007/s10479-012-1119-0

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