Supply chain financing decision with installment redemption under dynamic pledge

Xin Cai, Dongdong Li, Jiaojie Chu and Xueyong Liu

Managerial and Decision Economics, 2025, vol. 46, issue 1, 266-281

Abstract: In this paper, the dynamic pledge financing decision problem of a borrowing enterprise is studied in the context of a supply chain finance system that includes a financial institution and a borrowing enterprise (small and medium‐sized enterprises [SMEs]). The optimal Inventory pledge, as well as redemption decisions of the borrowing enterprise, are analyzed under the consideration of constant and changing redemption prices, respectively, and the effects of the main parameters on the optimal decisions are discussed. It found that (1) when the redemption price is constant, the borrowing enterprise's optimal quantity of inventory pledge increases as the initial inventory quantity increases or the redemption price decreases; (2) when the redemption price varies, the borrowing enterprise's optimal inventory redemption quantity decreases as the initial inventory pledge and the redemption price increase; and (3) the borrowing enterprise's redemption decision is affected by the previous period's redemption quantity and the actual sales quantity. The conclusions of this paper not only provide suggestions for SMEs to make inventory pledge financing decisions but also provide references for financial institutions to formulate relevant financing rules.

Date: 2025
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/mde.4373

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:46:y:2025:i:1:p:266-281

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().