Abstract
In this paper, we design a supply chain financing (SCF) system with a manufacturer, a retailer and a commercial bank where the retailer is capital constrained under demand uncertainties. We formulate a multi-level Stackelberg game in which the manufacturer acts as the leader and the bank as the sub-leader. Considering the bankruptcy risks of the retailer, we analyze the optimal credit line for the commercial bank, the optimal order for the retailer and the optimal wholesale price for the manufacturer, respectively. Comparing the benchmark scenarios of no capital constraint and constrained capital without financing, interdependencies between the operational and financial decisions are explored, as well as coordination analysis of the wholesale price contract with different credit lines. Finally, by conducting numerical studies, interactions between the operational and financial decisions and the impacts of credit lines on contract coordination are illustrated. The results validate our theoretical analysis. Our analysis suggests that a suitable financing scheme with limited credit would motivate the capital-constrained retailer to order more and the wholesale price contract with finite loans would achieve coordination in the SCF system.
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