Online Finance in a Dual-Channel Supply Chain with a Capital-Constrained Manufacturer

Abstract

This paper investigates a dual-channel supply chain which consists of a capital-constrained manufacturer and an e-commerce platform. The manufacturer sells its products through an offline direct channel and an online platform. The platform can serve as a marketplace or a reseller for the manufacturer, while the platform provides online finance to the manufacturer. We discuss the equilibrium decisions of the manufacturer and the platform when the platform serves as two different roles. We find that when the total production quantity of the manufacturer who with an online marketplace channel exceeds a threshold, the manufacturer tends to choose the platform’s marketplace role for the online channel, unless the wholesale price and the upper limit of demand are high. When production quantity is below this threshold, unless the wholesale price and the upper limit of demand are low, the manufacturer tends to choose the platform’s reseller role for the online channel. The platform tends to choose the role whose production quantity exceeds the threshold. If both are exceeded, the platform chooses the marketplace role when the wholesale price is low, and if both are not exceeded, the marketplace role is better when the wholesale price is high.