Research On Supply Chain Operation And Financing Strategy Under Trade Credit

Supply Chain Finance aims to solve the financing problem of capital-constrained firms,which is the key field of economics and management.As one of the most important short-term financing for downstream firms,trade credit has attracted more and more attention.Trade credit allows the retailers to delay the payment of product orders,and the suppliers play the role of "banks",thus effectively alleviating the financial constraints within the supply chain.With the wide use of trade credit,many researchers pay more and more attention to how it affects the upstream and downstream of the supply chain.In this context,this paper studies the different effects of trade credit on the upstream and downstream of the supply chain,and puts forward specific solutions to the problems.In view of the impact of trade credit on downstream firms,this paper proposes a conditionally concessional trade credit(CTC)contract.The contract can stimulate the retailer to increase the order quantity,so as to achieve perfect supply chain coordination.By comparing the contract with the traditional quantity discount contract,we find that this contract is more flexible in implementation.In addition,the CTC contract naturally has the function of financing,which makes the contract applicable to the capital constrained retailers,which is impossible for most traditional contracts.Moreover,the CTC model is extended to the case of information asymmetry.The impact of information asymmetry on CTC implementation is explored,and the equilibrium solution of all parties under information asymmetry is achieved.The value of private information to the individual and the whole supply chain is further discussed.We find the proposed contract cannot achieve the supply.chain coordination under information asymmetry,but can still improve the performance of the supply chain.In view of the problem that trade credit leading to supplier's lack of capitals,this paper proposes two solutions.First,the paper proposes a new type of supply chain financing model-Retailer-sponsored Financing(RSF).In this model,the retailer has to repay the principal of the debt for the supplier,while the supplier only needs to repay the interest of the debt to the bank.This new financing model changes the risk factors the banks has to consider when evaluating loan risk.Under this model,the bank focuses more on the retailer's risk instead of the supplier's risk.Therefore,RSF spreads the loan repayment risk between the retailer and the supplier,and the order of repayment of retailers is changed from the supplier priority to the bank priority.The main results are as follows.First,compared with traditional bank credit,RSF does not always provide the supplier with a lower loan interest rate.Second,RSF will stimulate the supplier to provide the retailer with a more favorable trade credit contract.Third,the equilibrium solutions about whether the retailer should provide RSF are achieved.Then,under certain conditions,RSF can benefit the supplier,the retailer and the bank simultaneously,and effectively improve the efficiency of supply chain.Second,the paper proposes factoring accounts receivable financing.In this mode,suppliers pledge accounts receivables to financial institutions such as banks to obtain short-term financing.This paper finds that both retailers and suppliers will face bankruptcy risk in accounts receivable factoring,and suppliers are more likely to encounter bankruptcy.When the suppliers choose factoring accounts receivable,the suppliers' quantity is not always consistent with the expected quantity of the banks.The trend of the quantity changes is opposite,i.e.,the suppliers' quantity decreases with the increase of the initial capital,and the banks' expected quantity increases with the increase of the initial capital.In addition,both the financing interest rate and the credit rationing can effectively restrict the decision-making of suppliers,but the credit rationing is easier to achieve.