Research On Quantity Flexibility Contract Model In Financial-constrained Supply Chain

Supply chain is a dynamic alliance consisting of many enterprises which belong to different economic entities and make decisions with the aim of benefit maximization respectively, which contributes to double-marginalization effect and bullwhip effect on supply chain. Effective supply chain contract can be used to coordinate benefit-based relationships and assign risk-sharing among every member of supply chain, reinforce the collaboration of enterprises, and realize the coordination of supply chain. Now most of researches on supply chain contract are made on the assumption that supply chain members don't face any financial constraints which is ideal. With the development of global economy and intensifying market competence, it is ubiquitous that enterprises of supply chain face financial constraint problems, especially small and medium enterprises.Dividing supply chain enterprises'financing ways into external financing and internal financial, this paper introduces financing ways into financial-constrained supply chain and searches after supply chain coordination on the basis of quantity flexibility contract under the best financing way, which makes the supply chain contract more practical.We got those following conclusions.Firstly, compared to external financing, while the supplier is a good credit rating company, internal financing can not only reduce the capital cost, but also is helpful to encourage the retailer to order more products, and thus makes supply chain more profitable. Secondly, setting internal financing rate is helpful to coordinate supply chain but its effect is limited compared to the flexibility of quantity. While motivating the retailer, the supplier should adjust the flexibility of quantity as well as the flexibility of quantity.