IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v52y2020i52p5756-5769.html
   My bibliography  Save this article

Financing equilibrium in a three-echelon supply chain: the impact of a limited bank loan

Author

Listed:
  • Qiang Yan
  • Fangyu Ye

Abstract

This paper studies a three-echelon supply chain consisting of a commercial bank, a supplier and a capital constrained retailer. The newsvendor-like retailer may not borrow up to what she needs from the bank due to low credit rating, and the remaining part may resort to the upstream supplier. Under the hybrid financing scheme under combination of bank credit and trade credit (BT), we characterize the optimal loan ratio for the commercial bank, the optimal wholesale price for the supplier and the optimal order quantity for the retailer, respectively. We investigate the impact of the bank loan ratio on the participants’ optimal decisions and profits. Comparing with the cases of no financing (NF) and bank credit financing only (BF), we determine financing preferences of the supplier and the retailer. Furthermore, we find that there exists a Pareto improvement region, where both the supplier and the retailer tend to accept BF or BT so that both participants can be better off in contrast to NF.

Suggested Citation

  • Qiang Yan & Fangyu Ye, 2020. "Financing equilibrium in a three-echelon supply chain: the impact of a limited bank loan," Applied Economics, Taylor & Francis Journals, vol. 52(52), pages 5756-5769, November.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:52:p:5756-5769
    DOI: 10.1080/00036846.2020.1772457
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2020.1772457
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2020.1772457?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yongming Zhang & Weida Chen, 2022. "Optimal production and financing portfolio strategies for a third‐party remanufacturing supply chain with capital constraint," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3072-3094, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:52:y:2020:i:52:p:5756-5769. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.