Optimal ordering and financing decisions for a loss-averse retailer under prospect theory

被引：0
|
作者：
Zhou Y. [1 ]
Liu M. [1 ]
Yu H. [1 ]
Cao B. [2 ]
Wang Y. [1 ]
机构：
[1] School of Business Administration, South China University of Technology, Guangzhou
[2] School of Management, Jinan University, Guangzhou
来源：
Xitong Gongcheng Lilun yu Shijian/System Engineering Theory and Practice | 2022年 / 42卷 / 11期
基金：
中国国家自然科学基金;
关键词：
capital constraint; financing; loss-averse retailer; ordering decision; prospect theory;
D O I：
10.12011/SETP2021-1555
中图分类号：
学科分类号：
摘要：
In practice, the small and micro retailers often have insufficient operating funds. In order to avoid the entire supply chain from being implicated, other members of the supply chain are willing to provide appropriate financing methods for them. This study explores the two financing modes of bank financing (BF) and trade credit financing (TCF), and to analyze the optimal strategies of small and micro retailers and suppliers. We develop a supply chain finance (SCF) system consisting of a capital-constrained loss-averse retailer, a risk-neutral supplier and a commercial bank, and formulate a Stackelberg game model in which the supplier acts as the leader. Our findings reveal that the retailer’s optimal order quantity and the supplier’s optimal wholesale price simultaneously decrease in the retailer’s loss aversion level and initial capital. The retailer who is extremely risk-averse prefers the TCF, whereas the supplier may refuse to provide it due to higher risks. The retailer who is less risk-averse prefers the BF as the wholesale price is lower. In addition, the expected profit of the entire supply chain under the TCF is always slightly higher, and the conservative ordering behavior adopted by loss-averse retailer will lead to a decline in profit. © 2022 Systems Engineering Society of China. All rights reserved.
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页码：2957 / 2975
页数：18
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