The Pricing Decisions In A Two-echelon Cross-border Supply Chain With A Financially Constrained Retailer

Since entering the 21 st century,the total trade volume of the major economies have increased rapidly.Under the background of accelerating economic globalization,international trade of the major economies are developing rapidly.Because the participants in international trade are often in different countries or regions,the cross-border supply chain is generally existing in the current business practice.Besides,with the growth of world economy,the demands of international markets are also increasing.Cross border supply chain participants need more currency funds to meet the growing market demands.So the capital constraint has become one of the main problems that plaguing cross-border supply chain participants.When capital constraint participants' financing quota increasing in cross-border supply chains,how to reduce financing costs is also a core concern of financing participants in cross-border supply chains.With a wholesale price contract,based on whether the conditions of a third party financial institution make decisions,this paper discusses a cross-border supply chain's pricing decisions respectively and also analysises whether the decision of a third party financial institution affect the financing and ordering strategies of a cross-border supply chain.In addition,when a third party financial institution are not involved in decision-making,this paper discusses a financially constrained retailer in a cross-border supply chain swaps currency with another financially constrained retailer in a non cross-border supply chain;explores ways of financially constrained retailers reducing the financing cost when the exchange rate fluctuates;analyzes the impacts of the proportion in currency swaps on cross-border supply chains' and non cross-border supply chains' pricing decisions.Our research shows: firstly,when suppliers are leaders of the Stackelberg game,whether a third party financial institution as a decision maker will have not impact on suppliers' pricing decisions in a cross-border supply chain,but have some impact on retailers' pricing decisions in cross-border supply chains.Secondly,suppliers can actively respond to exchange rate fluctuating only.When considering the decision of a third party financial institution,the third party financial institution can also actively respond to exchange rate changing.However,the results will be affected by stable market efficiency of suppliers.Thirdly,participants' income in cross-border supply chains will be affected by the exchange rate.The retailers of a domestic supply chain will be affected by the exchange rate when retailesr' capital gap is more large than the retailer in a cross-border supply chain.In addition,when considering the decision of a third party financial institution,the third party financial institution's income also will be affected by the exchange rate.Fourthly,the income distribution' ratio of currency swap will affect the profits of retailers in the cross-border supply chain and the non-cross-border supply chain.When the capital gap of retailer with financial constraints in the non-cross-border supply chain is smaller than that of the retailer with financial constraints in the cross-border supply chain in the currency swaps,the exchange rate volatility will affect the profits of the upstream supplier of the retailer with capital constraints in the non-cross-border supply chain.In addition,suppliers in both the the cross-border supply chain and the non-cross-border supply chain can actively respond to the income distribution's ratio changing only.Finanlly,based on the conclusions,this paper gives some business inspirations,which provides some countermeasures and suggestions for the business practice.