Optimal Decision For Three Level Supply Chain With Delay In Payment And Order Financing

Supply chain coordination is an important field in the research of supply chainmanagement; its purpose is to make the supply chain members’ decision-makingconsistent with the interests of the whole supply chain without prejudice to theinterests of all parties, and enhance the overall interests of the supply chain at thesame time. By order financing and delay in payment to alleviate the problem of fundsshortage of supply chain members, so as to improve supply chain performance is oneof the ways to achieve supply chain coordination. In reality, the operation of thesupply chain participants tend to be more than two companies, it has multipleparticipants in the supply chain. A three-level supply chain consists of a manufacturer,a supplier, and a retailer is the most simple in multiple supply chain, its fundamentallydifferent from the traditional two-stage supply chain, so research the effect of delay inpayment and order financing to supply chain members’ decision-making in this typeof three-level supply chain have important theoretical significance and practicalsignificance.This paper based on the study of the scholars, chooses a multi-level supply chainconsists of a single supplier, a single retailer, and a manufacturer as the researchobject, the manufacturer has the absolute advantage, using the game theory andcontract theory modeling and analysis, study the problem of optimal decision makingand profits of the supply chain members with delay in payment and order financing inthree-level supply chain under optimal decision and members of the performanceproblems.First constructed profit model of supply chain member under capitalunconstrained situation and financing model with both upstream and downstreammember delay in payment and supplier financing by manufacturer’s order undercapital constrained situation. Use Stackelberg game model, under the object ofmanufacturer’s profit maximization, calculated the optimal wholesale price ofmanufacturer, optimal order quantity for retailer in capital unconstrained case;optimal wholesale price, optimal delay time of payment and max delay limits formanufacturer, optimal order quantity for retailer and profit of the supply chainmembers.Then make quantitative simulations with the software Matlab, study has shownthat decision making of manufacturer constraint by both supplier and retailer profit； the mode of delay in payment and order financing in multi-level supply chain canrelieve capital constrain of supplier and retailer, improve supply chain performance;manufacturer’s profit monotonic within the constraints before the peak, increases withthe manufacturer’s wholesale price and the delay time of payment; by setting areasonable parameters, the manufacturer’s profit is higher than the maximum value ofunconstrained situations, profit of supplier and retailer can’t reach the point of optimalvalue of sufficient capital situations and continue to diminish with the increases ofdelay time in payment.