Research On Supply Chain Option Contract Based On Capital Constraints

In recent years,with the enhancement of people’s living standards,consumers5 demand is increasingly presenting lots of new characteristics such as diversification and personalization,resulting from these change,more and more products have the characteristics of seasonal products which also occupy a large proportion in the national economy of our country.But due to the obvious characters of long production lead time,short sales period,and uncertainty demand,operations of the seasonal product supply chain members are facing negative impacts and business risks.Therefore,how to alleviate the impact of uncertainty demand and reduce the risk of decision-making is a very challenging problem.In addition,the overall revenue of the supply chain is impaired as the supplier chain members only consider maximizing their own benefits,it is created "double marginalized effect" of supply chain.However,the existing supply chain coordination studies which based on option contracts rarely take into account the supplier credit default and retailer sales effort.Based on the realistic background,this paper researches the two-echelon supply chain system consisting of a supplier and a retailer with funding constraint,when the consumer demand and retail price are uncertain.The article analyzes the application of option contract in supply chain coordination.Further,considering the impact of retailer sales effort on supply chain coordination.In the case of allowing the option to default,the manufacturer’s and retailer’s decision are proposed,from which the retailer’s portfolio procurement policy and the manufacturer’s optimal output decision are derived.Then we reveal the coordination of successful coordination with option contract,including the range of option price and exercise price and the negative correlation between exerice price and option price.Moreover,we limit the reasonable financing rate range.Finally,through the numerical analysis we analyse the impact of option default cost on the expected return of supply chain.The results of theoretical analysis and numerical simulation show that;in the case of the retailers do not take sales effect,the option contract can coordinate the supply chain with capital constraints and realize the profit distribution among the supply chain members.And the options contract,by introducing cost-sharing mechanism,can coordinate the supply chain,which cannot be coordination by conventional options contract.