The Contract Design Of Financing And Ordering In A Supply Chain With The Capital Constrained Retailer

The key problem that small and medium sized enterprises(SMEs)need to be solved in the process of development is capital constraint.In practice,there are two ways for capital constrained enterprises to raise money: debt financing and equity financing.Debt financing mainly includes bank credit and trade credit.The traditional financing mode bank loans has high requirement for the SMEs and it is very difficult to loan from the bank.Trade credit reduces the risk of capital constrained enterprises,and equity financing reduces their financing cost.Therefore,trade credit and equity financing are the most popular financing vehicles in today's business.The operation decisions of an enterprise are closely related to its financing modes.Based on the financing practices and game theory,this paper studies the financing decisions and ordering decisions of capital constrained enterprises.The main researches are as follows:First,we investigate the contract of capital constrained supply chain with risk constraint.Under the uncertain market demand,capital constrained retailer faces with the bankruptcy risk.They use bank credit and trade credit to solve capital constraint problem.We first depict the risk of the retailer and supplier and construct a mean-variance framework to analyze the optimal decisions of the retailer and supplier under two financing modes.By comparing the optimal decisions of two financing modes,we obtain the critical condition of financing equilibrium.We further examine the impacts of risk constraint on the supplier's optimal operation decisions and financing decisions.Second,we study the contract under two financing modes with both the retailer and supplier as the loss aversion decision maker.Under the uncertain market demand,we use the prospect theory to depict the capital constrained retailer and supplier as loss aversion decision maker 's utility function.The supplier,as the leader of the Stackelberg game,decides the wholesale price under two financing modes.The capital constrained retailer,as the follower,decides the order policies.We further compare the optimal decisions of bank credit to trade credit and obtain the retailer 's financing preference under the different capital level.It shows that the capital constrained retailer will not always prefer benefit trade credit to bank credit.Third,we study the contract design when the capital constrained retailer uses mixed financing modes.The capital constrained retailer use mixed mode of equity financing and debt financing.By constructing the game model under the mixed financing strategy,we solve the optimal decision under two mixed financing modes.We then compare the optimal decisions of two mixed financing modes and obtain the retailer's financing preference.We further study the financing order decision issue of two constrained retailers under competitive environment.The supplier,as a leader in the Stackelberg game,can provide trade credit to one or two capital constrained retailers.Based on the case of the supplier provide trade credit to capital constrained retailer,we consider the game equilibrium of three cases.We explicitly model the evolution of equilibrium scenarios between the supplier and the two retailers.We also explore the condition under which the other retailer will be allowed to enter into the supply chain.The results show that when competitive in tensity is large,the supplier is willing to merge with one retailer.We also find that the retailer who drops out of the supply chain can break the merger of the supplier and the rival by using equity financing and debt financing.In competitive environment,the capital constrained retailer has the optimal equity financing ratio through external equity financing and debt financing,i.e.,the retailer has optimal capital structure.Finally,we further analyze the impact of the equity financing ratio and competition intensity on the optimal decisions and each player's profit.Finally,this paper studies the contract design when the capital constrained supply chain uses mixed financing modes with risk constraint.The capital constrained retailer use two mixed financing modes.We first depict the risk of the supplier and retailer and find that mixed financing strategy can reduce the risk of the supplier and retailer.Then we construct a mean-variance framework and solve the optimal decision under two mixed financing modes.Further,we compare the optimal decisions of two mixed financing modes and obtain the retailer 's and supplier 's financing preference under risk constraint.