Trade credit contract in the presence of retailer investment opportunity
| Autor: | Yugang Yu, Xiaohang Yue, Samar K. Mukhopadhyay, Kehong Chen, Yong Zha |
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| Rok vydání: | 2019 |
| Předmět: |
Rate of return
021103 operations research Supply chain 0211 other engineering and technologies Ocean Engineering 02 engineering and technology Management Science and Operations Research Newsvendor model Investment (macroeconomics) 01 natural sciences Channel coordination Microeconomics 010104 statistics & probability Trade credit Order (business) Modeling and Simulation Profitability index Business 0101 mathematics |
| Zdroj: | Naval Research Logistics (NRL). 66:283-296 |
| ISSN: | 1520-6750 0894-069X |
| DOI: | 10.1002/nav.21840 |
| Popis: | This paper presents a model for designing a trade credit contract between a supplier and a retailer that would coordinate a supply chain in the presence of investment opportunity for the retailer. Specifically, we study a newsvendor model where the supplier offers a trade credit contract to the retailer who, by delaying the payment, can invest the accounts payable amount and earn returns. We find that when the channel partners have symmetric information about the retailer's investment return, a conditionally concessional trade credit (CTC) contract, which includes a wholesale price, an interest‐free period, and a minimum order requirement, can achieve channel coordination. We then extend the model to the information asymmetry setting in which the retailer's investment return is unobservable by the supplier. We show that, although the CTC contract cannot achieve the coordination in this setting, it can effectively improve channel efficiency as well as profitability for individual partners. |
| Databáze: | OpenAIRE |
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