Research On Financing And Operational Strategies For Capital-constrained Supply Chains

Small and medium-sized enterprises(SMEs)are an important source of cultivating new economic drivers,and play a key role in expanding employment,stimulating innovation vitality,and contributing to national economic growth.Nevertheless,SMEs often face capital constraints owing to their smaller scale,high operating risk,and poor profitability.Actually,the capital constraint is one of the biggest obstacles faced by SMEs,which not only seriously restricts the daily operation decision of SMEs,but also influences the healthy development of upstream and downstream enterprises,and eventually reduces the stability and competitiveness of the whole supply chain.Therefore,effectively solving the problem of capital constraints of SMEs in the supply chain is highly important to improve the supply chain management level of enterprises,and also reflects the practical needs of social and economic development at home and abroad.Supply chain finance,as an innovation in the intersection of supply chain management and finance,provides a new way to solve the problem of "difficult financing and expensive financing" for SMEs.Given this,this dissertation will be based on the theory of supply chain finance and combined with multiple business operation scenarios to deeply explore the financing and operational strategies of capital-constrained supply chains.The main research content includes four aspects as follows:1.Research on supply chain financing and operation problems considering the retailer with capital constraints.Consider a two-level supply chain consisting of one supplier and one capital-constrained retailer,in which the capital-constrained retailer can apply for bank financing or trade credit to support its ordering activities,whereas the retailer has an imperfect credit position,that is,s/he may be exposed to the exogenous credit risk(captured by the retailer’s credit rating).First,the supply chain modeling concerning two financing formats is completed by capturing both the demand risk and credit risk,and the corresponding equilibrium order quantity and wholesale price are derived.In the meantime,the necessary conditions for every financing scheme’s feasibility are established based on the different combinations of credit rating and production cost.Then,when both financing formats are feasible,the supply chain parties’ financing preferences between bank financing and trade credit are analyzed from the novel perspective of credit rating,finding that the retailer always benefits from bank financing,whereas the supplier’s preferences are determined by two critical factors(i.e.,the retailer’s credit rating and the production cost).Importantly,it is observed that even if the production cost is not relatively small,the supplier is still motivated to offer trade credit if the retailer’s credit rating satisfies a certain condition.Also,when the supplier and retailer hold conflicting preferences,a wholesale price Pareto zone is identified,in which both parties can choose trade credit to achieve a win-win situation(i.e.,trade credit is the unique equilibrium).Finally,an extended model is proposed by considering that the capital-constrained retailer has a positive initial endowment to discuss the joint impact of initial capital and credit rating on the supply chain parties’ equilibrium decisions and performances.2.Research on supply chain financing and operation problems considering the retailer with capital constraints in the competitive environment.Consider a supply chain system composed of one common supplier and two competing retailers,in which the two retailers have two distinguishing asymmetric features regarding power structure and capital status.The capital-constrained retailer can apply for bank financing or trade credit to support its ordering activity,but s/he may be exposed to the exogenous credit risk(as measured by its credit rating).First,by combining different financing formats(bank financing & trade credit)and the two retailer’s competitive behaviors(Stackelberg game & Nash game),four supply chain models are constructed,and the corresponding equilibrium wholesale price,interest rate,and order quantity are derived,respectively.Next,the supply chain members’ financing scheme and power structure preferences are discussed.The results show that the supplier always benefits from the two retailers holding an unbalanced power structure(implement the Stackelberg game)and providing trade credit to the financially constrained retailer;the capital-constrained retailer always prefers to play the Nash game with its competitor and accept trade credit;the well-funded retailer always hope its competitor adopt bank financing,but s/he do not always benefit from “ to be the first mover”,i.e.,when the competition intensity is below a specific threshold and the capital-constrained retailer’s credit rating is at a medium level,s/he can achieve a higher performance in Nash game structure.Lastly,by assuming that the well-funded retailer has a dominant power structure and is a strategic player(i.e.,s/he can freely choose the move sequence),the influence of the capital-constrained(weak)retailer’s financing decisions and credit rating status,as well as the competition intensity on the well-funded(dominant)retailer’s order sequence selection is deeply investigated.We also further discuss the evolution law of the supply chain equilibrium model when dominant retailers can strategically use "move first"(or "move simultaneously")to threaten the capital-constrained retailer(or the supplier)to improve its profit.3.Research on supply chain financing and operation problems considering the supplier with capital constraints.Consider a pull supply chain system composed of one capitalconstrained supplier and one retailer,in which the supplier cannot access bank loans,but can apply for retailer direct financing or equity-for-guarantee swap financing to support its production activities.Firstly,under the exogenous wholesale price,the supply chain models of two financing schemes are established,and the corresponding equilibrium production quantity and interest rate are derived.Through comparative analysis,it is found that for the supplier,the retailer,and the whole supply chain,any of the two financing formats can be preferred,depending on production cost,wholesale price,and equity transfer ratio,which implies that both financing formats may become financing equilibrium.Next,under the endogenous wholesale price,the optimal wholesale prices of the two financing schemes are deduced respectively.Similarly,regarding the supply chain parties and the entire system’s financing preferences,the results show that the retailer and the whole supply chain always prefer equity-for-guarantee swap financing,whereas the suppliers prefer equity-for-guarantee swap financing if and only if the production cost is at a high level;otherwise,s/he prefers direct financing,that is,in this situation,equity-for-guarantee swap financing will be the unique financing equilibrium.Interestingly,the study also reveals that no matter whether the wholesale price is exogenous or endogenous,when the production cost or wholesale price(exogenous situation)is at a high level,the supplier should actively negotiate with the retailer to promote equity-for-guarantee swap financing(and the larger the production cost or wholesale price,the greater equity dividend ratio should be transferred),which can lead to a win-win-win situation for all the supply chain members and the system.That is,equity-forguarantee swap financing exhibits a benign "tolerance effect" on a high production cost or a high wholesale price.Finally,from the perspective of supply chain coordination,the coordination effect of the two financing formats is investigated,finding that both financing schemes can achieve supply chain coordination perfectly by choosing a set of reasonable financing contract parameters,as long as the production cost is not sufficiently high.4.Research on supply chain financing and operation problems considering the participation of the e-commerce platform.Consider an e-commerce supply chain system composed of one supplier,one capital-constrained e-tailer,and one e-commerce platform,in which the e-tailer purchases a newsvendor-type product from the upstream supplier and sells it to end consumers via the platform;meanwhile,the e-tailer can adopt platform financing or trade credit to support its ordering activities.First,the supply chain models of the two financing schemes are established,and the corresponding equilibrium order quantity and interest rate are found.Through comparative analysis,proving that the e-tailer benefits from platform financing if the wholesale price is lower than a specific threshold(or the commission rate is higher than a specific threshold);otherwise,trade credit is preferred.Meanwhile,the effectiveness of the two financing formats from the perspective of the whole supply chain is examined,and the results show that compared with the situation without capital constraints,platform financing(or trade credit)can improve the system’s performance if the commission rate is high(or the production cost is low).Then,the sensitivity analysis of critical parameters(including wholesale price,platform commission rate,and initial capital level)is carried out,and some important managerial insights are obtained.Finally,an extended model is proposed considering that bank financing is accessible,proving that even if external bank financing is available,the e-tailer will not actively apply for bank loans because the bank interest rate is always higher than the platform interest rate and trade credit interest rate.