Newsvendor’s Decisions Under Capital Constraint And Market Information Asymmetry And Updating

Small and medium-sized enterprise always suffer from lacking of enough capital to support daily operation and business expansion, but unfortunately they also have difficulties in external financing, and mostly because their information asymmetry problem with their investor(the bank). Furthermore the accuracy of enterprise’s forecasting about market demand information will affect the investing efficiency directly.How enterprise choose their financing decision under capital constraint, how the information asymmetry problem between enterprises and the bank impact their operation decision, how enterprise adjust their orders under market information updating, this dissertation analyzes these problems through newsvendor model by theoretical investigation and numerical analyses. As follows:(1) Coming up with that the newsvendor’s financial policy can be characterized, the optimal debt level is given and also the newsvendor will borrow more when he has less capital.(2) Coming up with that the relationship between how much capital the newsvendor need to borrow and how much the bank forecast the newsvendor need, which could transform to another problem, which is the relationship between the newsvendor’s actual orders and the orders the bank expected under the market demands information asymmetry. When the mean value of the market demand that the newsvendor expected is higher(lower) than that the bank expected, the orders will be more(less) than the bank expected; when the mean value of the market demand that the newsvendor expected is equal to that the bank expected, the orders will be more(less) than that the bank expected when the cost(ordering and financing cost) is less(more) than half of the retail price.(3) Coming up with that the orders when the newsvendor and the bank are acting like one is higher than that under the information asymmetry and the profits of the newsvendor and the bank when there is information asymmetry is less than the whole profit of the supply chain. And we suggest an information sharing contract based on revenue sharing and some additional constraints, such as the promises of true information sharing and the adequate founds the bank must support when the investment risk is under control, and the bank can adjust the interest according to the risk as long as keep newsvendor’s revenue is better than that under information asymmetry.(4) Coming up with that to release the contradiction about the ordering time between the newsvendor and the manufacture in supply chain, the manufacture could allow the twice ordering mode, under which the newsvendor can adjust his first-time order at the second ordering time according to the updated market information. After information updating the uncertainty of the marketing information will be decreased, according to our research the optimal orders will decrease(increase) when the market mean value remains unchanged and the market price is twice smaller(larger) than the wholesale price; the optimal orders will decrease when the market mean falls; and the optimal orders will increase when the market mean rises.All the conclusions of this dissertation which have been verified by numerical analysis could give small and medium-sized enterprise with capital constraint under information asymmetry and market information updating some tips about operation decisions, additionally help investors’ decisions.