Financing And Ordering Decisions In A Risk-averse Supply Chain

At present,the problem of difficult and expensive financing of Small,medium,and micro enterprises(MSMEs)remains prominent,which seriously restricts the development of enterprises.Hence,how to effectively solve the funding difficulties of MSMEs has become critical to promoting economic.MSMEs mainly use debt(including bank and trade credit financing)and equity financing to solve the shortage of capital.Bank credit is the most traditional financing source,but it needs higher credit certificates.Trade credit can alleviate the capital flow of MSMEs,but it will make enterprises constrained by core enterprises.Equity financing can reduce MSMEs’ bankruptcy risk,but it may cause them to lose management rights.In financing practice,MSMEs often break through a single financing channel to use portfolio financing for solving the capital gap.However,when facing commercial risks brought demand uncertain and financing,enterprises show risk aversion behavior.Hence,members’ risk aversion behavior seriously affects the operational decision-making of capitalconstrained MSMEs.Combined with MSMEs’ financing practice,this paper uses game theory and other theories to study the financing and ordering decisions in a risk-averse supply chain.The main contents are as follows:First,financing and ordering decisions in a risk-averse supply chain under debt financing.In uncertain market demand,we consider a two-level supply chain composed of a dominant supplier and a capital-constrained retailer,which can use a bank or trade credit financing to satisfy ordering decision.When facing commercial risks,members are risk-averse.First,we construct a supplier-led Stackelberg game model and use the CVa R criterion to measure members’ risk aversion.Then the optimal decision-making is obtained by using the backward induction method under the two financing schemes.By comparing members’ profits under the two financing schemes,we derive the supply chain financing equilibrium.The findings that the degree of risk aversion of the supplier determines the financing channels.In addition,we further explore the impact of the initial capital level on supply chain financing decisions.Second,financing and ordering decisions in a risk-averse supply chain under equity financing.Based on the third chapter,we further consider the capital-constrained retailer using equity financing to satisfy uncertain market demand.First,the equilibrium solutions of the Stackelberg game model under equity financing are obtained by using the backward induction method.Following the optimal decisions under bank and trade credit financing in Chapter 3,we derive the supply chain financing equilibrium by comparing the profits of members under the three financing schemes.The findings that there exists a valuation level threshold that affects the supply chain financing equilibrium.When the valuation level is greater than the threshold,equity financing is financing equilibrium.Otherwise,there exists a threshold of the supplier’s risk aversion coefficient that affects financing equilibrium.When the risk aversion coefficient is less than the threshold,members prefer bank credit financing.Otherwise,trade credit is financing equilibrium.Third,financing and ordering decisions in a risk-averse supply chain under portfolio financing of bank credit and equity financing.Based on the third and fourth chapters,we further consider the capital-constraint retailer as a risk-averse MSMEs,which needs to improve its credit level through the supplier’s equity investment or credit guarantee to obtain bank credit financing.First,we use the backward induction method to obtain the equilibrium solutions of the Stackelberg game model.By comparing the profits of members under two financing schemes,we derive the supply chain financing equilibrium.The findings that there exists a critical threshold of dividend ratio(credit guarantee coefficient)to induce the supplier to be more willing to provide the portfolio financing of bank credit financing and equity financing(bank credit financing and supplier guarantee financing),and the retailer also prefers the financing scheme.Compared with the Non-financing benchmark,the supply chain can achieve Pareto improvement by providing an appropriate dividend ratio and guarantee coefficient under the two portfolio financing schemes.Fourth,financing and ordering decisions in a risk-averse supply chain under portfolio financing of trade credit and equity financing.Based on the fifth chapter,we further consider that the capital-constrained retailer can solve the capital gap through a portfolio financing scheme of trade and bank credit financing(TCF-BCF)or trade credit and equity financing(TCF-EF).First,we use the CVa R criterion to incorporate the risk-averse behavior of members into the objective function under the Stackelberg game model.Then the equilibrium solutions under two portfolio financing are obtained by the backward induction method.Further,we analyze members’ profits under two portfolio financing to derive the supply chain financing equilibrium.The findings show a high risk-averse behavior makes the retailer’s ordering more conservative,while a high valuation level encourages the retailer to order more.There further exist valuation level conditions that make the investor and the supplier prefer to offer TCF-EF,and the retailer is willing to choose this financing option.The supply chain can reach Pareto improvement by turning the valuation level relative to the other portfolio financing scheme.Fifth,financing and ordering decisions in a risk-averse supply chain under portfolio financing of debt and equity.Based on the previous chapters,we further consider the capital-constrained retailer funds its business from the portfolio financing of debt and equity.When facing business risks brought demand uncertainty and financing,the retailer is risk-averse.We construct a supplier-led Stackelberg game model.Then the CVa R criterion is used to measure the risk-averse behavior of members.Finally,the optimal solutions of the supply chain are obtained by using the backward induction method.Through analyzing the optimal solutions,we derive the optimal financing proportion structure of the supply chain.In addition,we further explore the impact of risk aversion,valuation level,and credit rate on supply chain operation decisions.Through the research on the financing and ordering decision of risk aversion supply chain under debt and equity portfolio financing,the supply chain portfolio financing theory is further improved.