Research on the Coordination Strategy in the Supply Chain with Substituting Procurement Financing Based on Option Contract

The substituting procurement financing mode solves the difficult financing problems caused by the small and medium-sized enterprises' funding constraints, but it also has the problems of efficiency loss. Based on the supply chain constituted by a third party logistics (3PL) company and one retailer in this paper, we analyze and prove the efficiency of introducing the option contract into the substituting procurement financing mode, and give the reasonable option pricing combination through the Newsboy model. It shows that there is a reasonable option pricing combination in the substituting procurement financing mode that lets supply chain achieve effective coordination, namely that the total ordering under the option contract reaches the centralized decision-making level without option contract, and retailer's and logistics company's profits both achieve an great improvement. Finally, we use a numerical example to verify the correctness of the results.