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- Title
Coordinating Supply Chain Financing for E-commerce Companies Through a Loan Contract.
- Authors
Zhang, Jinjin; Li, Xin; Kuo, Yong-Hong; Chen, Yan
- Abstract
This paper considers an online retailer and his or her manufacturer, both facing financial constraints and wishing to get loans from their e-commerce platform-backed finance company. Based on shared transaction data and monitored sales accounts, a tripartite loan contract is proposed to coordinate three parties' actions in this supply chain financing problem. We prove that the proposed loan contract aligns the decentralized decision-makings of each party and duplicates the optimal channel performance under a fully integrated decision-making framework. A case study is then conducted to illustrate the performance of the proposed loan contract. The result shows that the proposed loan contract outperforms wholesale-price contracts, where coordination does not take place, and buyback contracts, where coordination happens between the retailer and the manufacturer only. Furthermore, a sensitivity analysis reveals that profit allocations among the lender, the retailer, and the manufacturer resulted from the proposed loan contract are more balanced when the cost-to-retail ratio or risk premium is high.
- Publication
SAGE Open, 2021, Vol 11, Issue 4, p1
- ISSN
2158-2440
- Publication type
Article
- DOI
10.1177/21582440211065455