Game Analysis Of Capital Constrained Supply Chain Financing Based On Dynamic Inventory

In the case of capital constraints,many enterprises often need to use short-term financing to alleviate financial pressure and ensure the operation of the company.Small and medium-sized enterprises are unable to obtain the required bank loans due to the lack of fixed assets,but the order-based trade credit provided by the supplier to the retailer can solve this problem.This paper considers a two-echelon supply chain consisting of a well-funded supplier and a capital-constrained retailer.At the beginning of each sales season,the retailer need to place an order from the supplier to meet the stochastic demand of the period.The capital-constrained retailer determines the order quantity and whether to borrow loans from a bank or the supplier or just use its initial capital,according to its finance and stock status with the wholesale price provided by the supplier.This paper studies retailer's and supplier's problem under single?period and multi-period bank credit and trade credit to obtains the theoretical model and numerical analysis of optimal order quantity,optimal wholesale price and game equilibrium under different financing options.First of all,this paper builds Stackelberg game framework with the supplier as the leader.Dynamic inventory is introduced to build multi?period general financing model consisting of inventory and cash-flow transfer equation and the expected cumulative profit-to-go.Secondly,this paper proves that the retailer's decision under single-period bank financing is not subj ect to financial constraints.In terms of single-period trade credit,the retailer's initial inventory and capital are divided into three different wealth regions to discuss the optimal financing and ordering strategies of different wealth regions.This paper also proves that the trade credit cannot fully coordinate the supply chain but can improve the supply chain's performance rather than bank credit.Thirdly,based on the single-period static supply chain financing model,this paper extends to the two-period dynamic financing model.This paper discusses the retailer's different asset situations after the first sales period so as to obtain the optimal strategy matrix of the retailer and the supplier under bank and supplier financing with backward induction.Finally,numerical analysis compares the performance of the supply chain under single-period and two-period credit from the bank or the supplier respectively and illustrates that the trade credit and the two-period setting can improve the supply chain's performance and maximize both retailer's and supplier's expected profit,which provides support for our theoretical analysis.