Modeling Quantity Discounts Under Confirming Storage Financing

As the global economic integration, the competition between enterprises is nolonger limited to the counterpart, the focus of competition is gradually transferring tothe supply chains. In order to achieve the efficient operation of supply chain,third-rate of supply chain which is the "information flow","logistics","cash flow",joint coordination as a precondition. In supply chain, the core enterprise has alwaysbeen in the leading position, the upstream and downstream enterprises resident in thesubordinate position. Upstream and downstream enterprises due to their size, creditrating and other constraints, financing more difficult, plagued by the problem ofinadequate funding is becoming more serious, and thus also leads to inefficiencies inthe entire supply chain. Among the means to solve the plight of SMEs, the bankinvolved in the supply chain finance is one of the most effective methods that caneffectively help SMEs solve financial constraints.Supply chain contracts are mostly important means and methods to coordinate inthe supply chain. Therefore the supply chain contracts in supply chain operations havebecome more widely used. According to the actual situation in our country, more andmore scholars began to pay close attention to the coordination of the supply chaincontracts and financing contracts. Though confirming storage financing model iswidely used by many enterprises, the existing research is given priority to withqualitative analysis, rarely discuss the financing contract and contract researchcombined with quantitative analysis. So this article first to consider into the quantitydiscount contract confirming storage financing parameter design problems.According to the specific condition of small and medium-sized enterprise isfaced with the problem of capital constraint, consider small and medium-sizedenterprise operating decisions more relevant with the facts. In this paper weconsidered a finance-constrained two-level supply chain, which have a manufacturersand a retailer. When retailers have insufficient funds, we construct the supply chainfinancing model of confirming storage financing, and use the quantity discountcontract to coordinate the supply chain. Firstly, combining the Chinese enterprisepractices, we build the bank rate model under confirming storage financing, and thenwe use the Stackelberg game model to determine the optimal parameters of the bank, manufacturer, and retailer. Compared the centralized situation with the decentralized,we find that: in non-quantity discount contract，the decentralized decision can’tachieve supply chain system coordination. In quantity discount contract，when thediscount and rebate the manufacturer choose is given, the profit of the retailer and themanufacturer has been improved, the whole supply chain coordinated as well. Finally,this paper analyzes the actual cases verify the correctness of the model.