Pricing and Financing Strategies for a Green Supply Chain With a Risk-Averse Supplier

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.