Financing strategies for a dual channel supply chain that faces stochastic demands and loss-averse and financially constrained retailers are studied. By using the Stackelberg game theory, we establish a trade credit model and a bank credit model and then analyze supply chain members’ optimal operational decisions under the two financing models. Our numerical analysis reveals the impact of retailers’ loss aversion coefficient and initial capital on their decisions. The results show that retailers’ optimal order quantity decreases in line with their loss aversion coefficient, and the decline rate of optimal order quantity under bank credit is larger than that under trade credit. When the loss aversion coefficient is relatively large, retailers and manufacturers prefer bank credit. Otherwise, both sides prefer trade credit. When initial capital is relatively large, retailers and manufacturers prefer bank credit. Otherwise, manufacturers prefer trade credit and retailers prefer bank credit. In this case, manufacturers could achieve Pareto improvement of the dual-channel supply chain by limiting the wholesale price to a certain range. In addition, when consumers prefer retail channel, bank credit is an equilibrium financing strategy for a dual-channel supply chain. When demand fluctuation is small, trade credit is an equilibrium financing strategy for both parties.
Financing Strategy for a Dual-channel Supply Chain that Faces Loss-averse Retailers and Stochastic Demands
Introduction
This study is a Chinese-language paper titled “随机需求下考虑零售商损失厌恶的双渠道供应链融资策略研究” was published in “管理评论,” an A-class journal recognized by the National Natural Science Foundation and included in the CSSCI database.
We investigates supply chain financing strategies under stochastic demand, incorporating loss-averse behaviors of capital-constrained retailers. Utilizing a Stackelberg game framework, we develop two financing models: trade credit and bank credit. Through equilibrium analysis of dual-channel supply chain operations, we derive optimal decision-making rules. Numerical simulations further quantify how the retailer’s loss aversion coefficient and initial capital jointly influence operational strategies and financing choices, providing actionable insights for risk management and resource allocation.
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