Abstract
Return policy and supply chain finance are significant measures for banks and enterprises to improve the overall competitiveness of their supply chain. Supervision and guidance by banks are prerequisites to the smooth implementation of return policy and supply chain finance. This study analyzes the evolutionary stable strategy of three parties, namely, one bank, one supplier and one retailer, by establishing an asymmetric evolutionary game model. The model assumes that banks apply a reward and punishment policy for suppliers and retailers. Results show that regardless of the strategy the bank chooses, one party will always choose non-implementation of the return policy or non-adoption of the supply chain finance. From a short-term perspective, regardless of the strategy the bank chooses, suppliers and retailers will select the strategy of non-implementation and non-adoption, respectively. From the long-term perspective, suppliers and retailers will actively choose implementation and adoption whether or not there is bank supervision.
Highlights
It is well known that supply chain integration has become an inevitable choice for the sustainable development of China’s economy [1]–[5]
In the strategic interaction among the three parties, we found that different parameters, such as bank subsidy and default coefficient, significantly affect on evolutionary dynamics of strategies
If the main channel for retailer financing is to use its own assets as collateral, retailers with small self-owned funds are likely to have higher ordering levels due to limited liability for repayment of risks, making banks more vulnerable to losses [6]
Summary
It is well known that supply chain integration has become an inevitable choice for the sustainable development of China’s economy [1]–[5]. In the traditional supply chain system, retailers often have difficulty accessing financing from banks, due to their lack of collateral and credit history [12], [13]. We mainly pay attention to how to design return policy in a supply chain including one bank, one supplier and one retailer. To answer these questions, we study a supply chain which is composed of one bank, one supplier and one retailer. We study a supply chain which is composed of one bank, one supplier and one retailer In this model, the bank supervises the supplier to implement a return policy and the retailer to implement supply chain finance, carrying out certain incentives and penalties. The supplier implements the return policy and provides credit guarantees to the retailer involving supply chain finance.
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