Research On Production And Pricing Strategy Of Supplier Considering Initial Capital-Constraint

With the expansion of the scale of production,the rising labor costs and raw material prices,the suppliers as the small and medium-sized enterprises(SMEs)often face with the constraint of production capital,which largely limits their own operating and capacity requirements,and lead to suppliers cannot meet the need of the down-stream retailer's order.And for exactly this reason,the shortage risk is exacerbated and the continuity in production and stability of supply is affected,which weaken the supply chain market competitiveness.Therefore,it is of great practical significance to study the production and wholesale price decision of supplier under capital constraint.When suppliers face capital constraints,their production and business activities will be subject to a large degree of restrictions.This paper firstly analyzes the production and wholesale price strategy of the capital-constrained suppliers under the single-stage demand,and on this basis,the realization of the demand is divided into two stages.We discuss the corresponding decisions of the capital-constrained supplier through borrowing from banks and providing pre-order contract to retailers.When the demand is single-stage,the optimal production decision of the capital-constrained supplier under each mode is discussed,and the efficiency of the supply chain is compared.The study shows that if the supplier chooses external financing mode,its production and financing problems are equivalent to the ordering and financing decisions of the traditional newsvendor model.If the supplier obtains financing by providing advance-purchase contract to the retailer,the optimal production and the optimal advance-purchasing decision are studied under the different initial capital and the advance-purchase wholesale price.Furthermore,we analyze the state of the supply chain under the optimal advance-purchase wholesale price.The study shows that when the supplier does not have capital constraints or the initial capital is relatively abundant,the retailer will not use both pre-order and at-once order,that is,the supply chain is a single push mode or pull mode at this time.Whereas,In the presence of capital-constraint,the retailer will first choose the pre-order to increase inventory levels as much as possible,and the supplier also tends to use the retailer's pre-order funds and all of its own funds into production.Thus,the supply chain is presented a mixed mode of push and pull at this time.Finally,we analyze the impacts of supplier's initial capital on the optimal contract parameter and the game equilibrium through the numerical examples and validated the theoretical analysis.On the basis of single-stage demand,the realization of the demand is divided into two stages,that is,there is an update process of the market demand information before the demand information is realized.The paper analyzes the optimal decision of the supply chain participants from the perspective of supplier financing to banks and to retailers through providing advance-purchase contract.In this context,the supplier's production decision model is established when choosing to finance from the retailer.The study shows that if the two-stage demand information is independent of each other,the retailer's ordering problem is equivalent to a simple superposition of instant ordering and single-demand newsvendor model ordering,and the supplier's decision is equivalent to the two-stage production problem under the retailer's at-once ordering.In addition,the paper analyzes the influences of bank interest rate and supplier initial capital on supply chain and retailer decision.The results show that the equilibrium initial production and profit function of the supplier is decreasing in interest rate,while decreasing first and then increasing in the.initial capital.Afterwards,the sensitivity analysis of relevant factors was carried out.