Supply Chain Financing Decision Under Retailer-led Consignment Model

The high cost of financing and the low proportion of market channels are two major management problems faced by small and medium-sized enterprises.Small suppliers often face capital constraints in the production chain,which affects their profits,as well as the overall profitability and efficiency of the supply chain.With the rapid development of e-commerce,more and more ecommerce platforms emerge.They aggregate the data on the platform and provide sales channels and traffic for the small and medium-sized suppliers.At the same time,they provide lower threshold of loan options to the small and medium-sized enterprises on the platform.So many small suppliers use online platform retailers to sell products on consignment.Based on the newsboy model and using the Stackelberg game framework,this paper studies the situation of retailers providing credit loans to suppliers under the consignment mode of e-commerce platform in the retailer-centered supply chain.The retailer sets the terms of credit.The capital-constrained supplier chooses financing schemes and make production decisions in the face of different entry modes and financing conditions provided by the platform.We construct the expected profit description of all roles in the supply chain under various circumstances,obtain the optimal response function of order quantity by obtaining the optimal solution of the objective function,further clarify other parameters such as loan interest rate,loan amount equivalent,and find the retailer’s loan terms decision and supplier’s production decision.Firstly,the bank loan and retailer direct financing models under SOP cooperation mode are established.The study finds that retailers can achieve higher returns in loans,so they are more willing to provide loan contracts.At the same time,retailers can change the loan terms to precisely control the production volume of suppliers,to maximize their own profits.Secondly,this paper introduces the competition option of small retailers and finds that the existence of retailer competition brings higher profit protection to suppliers.Moreover,suppliers with lower self-owned capital are more inclined to choose large-scale retail platforms.Finally,this paper establishes several models of centralized supply chain,bank loan,retailer direct financing and reverse factoring under e-bank cooperation under FBP cooperation.We find that under different models,retailers can get higher returns,but prefer to choose internal factoring,which is more efficient.This paper also analyzes the conditions under which suppliers are more willing to choose FBP cooperation model,giving substantive operational decisions.