Abstract
This study investigated a green supply chain comprising a single supplier with financial constraints and a single retailer, while also considering the supplier's degree of risk aversion. A supplier-retailer Stackelberg game model was established under different financing situations, namely, bank financing and retailer's advance payment, and optimal decisions were derived for both the supplier and the retailer. The analysis examined the influence of the degree of the supplier's risk aversion, pricing and financing strategies on optimal decisions. The results show that high supplier risk aversion is not conducive to the supply chain green development. When the supplier has less initial capital, the strategy of advance payment provided by the retailer will be prioritized within the supplier's financial constraints. When the supplier's initial capital is more, he should use the initial capital for production. The study's consideration of the supply chain green level as an endogenous variable, as well as of the supplier's risk aversion, contributes to its novelty.
Highlights
T HE promulgation of relevant laws and regulations has enhanced the environmental consciousness of citizens, and green products are being demanded by an increasing number of customers
Improving the product green level is a crucial way for businesses to expand market demand and enhance competitiveness, and a principal element to be considered in improving supply chain competitiveness ( [4], [5])
When suppliers faced with financial constraints and various risks brought by the green supply chain, how to make optimal decisions will be an important research topic
Summary
T HE promulgation of relevant laws and regulations has enhanced the environmental consciousness of citizens, and green products are being demanded by an increasing number of customers. Kai Kang et al.: Pricing and Financing Strategies for a Green Supply Chain with a Risk-averse Supplier. Suppliers will face more uncertain risks in the green supply chain system on account of financial constraints, such as the change of products for green demand, the higher capital cost, the increase of demand uncertainty and so on. When suppliers faced with financial constraints and various risks brought by the green supply chain, how to make optimal decisions will be an important research topic. This research studies the green supply chain from the perspectives of supplier’s financial constraint and risk aversion which intersects research in the fields of operations and finance, and incorporates important variables riskaverse of behavioral economics into the research model.
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