Designing the Optimal Strategies for Supply Chain Financing Under Warehouse Receipt Pledging with Credit Line

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Conference Proceedings

Authors:
Yan, Nina
Tian, Tian
Publication year:
2011

The optimal strategy of financing through warehouse receipt pledging for retailers with capital constraints in the supply chain financing system under demand uncertainties is designed and investigated. We design a supply chain financing system composed of the manufacturer, the retailer and the commercial bank, in which the credit line and bankruptcy probability of the retailer are considered. The optimized financing interest rate for the commercial bank, the optimized order policy for the retailer and the optimized wholesale price for the manufacturer are analyzed respectively, and the comparison analysis about the optimal strategy for the financing strategy with and without credit line are proposed. It concluded that the financing strategy with limited credit line can stimulate the increase in order quantity inside the supply chain financing system and can provide the effective financing motivation for the risky retailer. Finally, we use the numerical study to analyze the influence of retailers with different lines of credit on the optimal strategy in supply chain financing system, thus verify the result of theoretical analysis.

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