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Supply chain financing mechanism with guarantee insurance

Author

Listed:
  • Xing Yu
  • Huaizhe Chen
  • Kongzhuo Xiang
  • Zhongkai Wan

Abstract

This paper designs a bankruptcy guarantee insurance contract for a capital constrained retailer who can choose two financing ways of trade credit and bank credit. Different from the existing research, we introduced a third party insurance institution to undertake the loss of the retailer in bankruptcy. Under the two financing mechanisms, we present the optimal decision for each subject and analyze the influence of each parameter on the decision making and the revenues. The results facilitate scientific policy development and provide a reference for promoting finance sourcing operations in a supply chain.

Suggested Citation

  • Xing Yu & Huaizhe Chen & Kongzhuo Xiang & Zhongkai Wan, 2021. "Supply chain financing mechanism with guarantee insurance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 308-318, March.
    • Handle: RePEc:wly:mgtdec:v:42:y:2021:i:2:p:308-318
    DOI: 10.1002/mde.3236
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    References listed on IDEAS

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    6. Hwan Lee, Chang & Rhee, Byong-Duk, 2010. "Coordination contracts in the presence of positive inventory financing costs," International Journal of Production Economics, Elsevier, vol. 124(2), pages 331-339, April.
    7. Panos Kouvelis & Wenhui Zhao, 2012. "Financing the Newsvendor: Supplier vs. Bank, and the Structure of Optimal Trade Credit Contracts," Operations Research, INFORMS, vol. 60(3), pages 566-580, June.
    8. Chan, Chi Kin & Wong, Wai Him & Langevin, A. & Lee, Y.C.E., 2017. "An integrated production-inventory model for deteriorating items with consideration of optimal production rate and deterioration during delivery," International Journal of Production Economics, Elsevier, vol. 189(C), pages 1-13.
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    Cited by:

    1. Bo Yan & Yanping Liu & Zijie Jin, 2023. "Joint coordination contract for capital‐constrained supply chains under asymmetric information," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 251-270, January.
    2. Bo Yan & Meng‐Ru Liang, 2023. "Alleviation effect of supply chain finance on financing constraints of high‐tech small‐ and medium‐sized enterprises," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1634-1641, April.
    3. Bo Li & Zijia Du & Minxue Wang, 2022. "Financing preference and the role of credit insurance in a green supply chain," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3882-3897, December.

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