The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract
This paper considers the strategy employed by a buy back guarantee contract with a capital-constrained distributor and a core enterprise. The distributor faces a nonnegative random demand, and the core enterprise applies buy back guarantee contract in order to interact with the capital-constrained d...
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| Format: | Article |
| Language: | English |
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Wiley
2014-01-01
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| Series: | Journal of Applied Mathematics |
| Online Access: | http://dx.doi.org/10.1155/2014/902739 |
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| _version_ | 1849399648041566208 |
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| author | Jian-xin Chen Jia-yin Chen |
| author_facet | Jian-xin Chen Jia-yin Chen |
| author_sort | Jian-xin Chen |
| collection | DOAJ |
| description | This paper considers the strategy employed by a buy back guarantee contract with a capital-constrained distributor and a core enterprise. The distributor faces a nonnegative random demand, and the core enterprise applies buy back guarantee contract in order to interact with the capital-constrained distributor. Mathematical model is built to get the optimal ordering quantity of the distributor and the optimal wholesale price of the core enterprise. Then sensitivity analysis of optimal ordering quantity is obtained about the wholesale price, the initial funds, and the salvage of the product. On that basis, the comparison is made between two financing modes—trade credit contract and buy back guarantee contract. In the end, a numerical analysis is illustrated. The results show that the different financing modes bring the different expected profits to supply chain system with the different initial funds, finding that the financing modes, buy back guarantee contract discussed in the paper, can create more value for supply chain system than trade credit contract. |
| format | Article |
| id | doaj-art-a3519957a4d4455cadd8841efdb6c414 |
| institution | Kabale University |
| issn | 1110-757X 1687-0042 |
| language | English |
| publishDate | 2014-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Applied Mathematics |
| spelling | doaj-art-a3519957a4d4455cadd8841efdb6c4142025-08-20T03:38:16ZengWileyJournal of Applied Mathematics1110-757X1687-00422014-01-01201410.1155/2014/902739902739The Model of Distributor Chain Financing Based on Buy Back Guarantee ContractJian-xin Chen0Jia-yin Chen1Faculty of Applied Mathematics, Guangdong University of Technology, Guangzhou 510520, ChinaSchool of Business Administration, South China University of Technology, Guangzhou 510641, ChinaThis paper considers the strategy employed by a buy back guarantee contract with a capital-constrained distributor and a core enterprise. The distributor faces a nonnegative random demand, and the core enterprise applies buy back guarantee contract in order to interact with the capital-constrained distributor. Mathematical model is built to get the optimal ordering quantity of the distributor and the optimal wholesale price of the core enterprise. Then sensitivity analysis of optimal ordering quantity is obtained about the wholesale price, the initial funds, and the salvage of the product. On that basis, the comparison is made between two financing modes—trade credit contract and buy back guarantee contract. In the end, a numerical analysis is illustrated. The results show that the different financing modes bring the different expected profits to supply chain system with the different initial funds, finding that the financing modes, buy back guarantee contract discussed in the paper, can create more value for supply chain system than trade credit contract.http://dx.doi.org/10.1155/2014/902739 |
| spellingShingle | Jian-xin Chen Jia-yin Chen The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract Journal of Applied Mathematics |
| title | The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract |
| title_full | The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract |
| title_fullStr | The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract |
| title_full_unstemmed | The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract |
| title_short | The Model of Distributor Chain Financing Based on Buy Back Guarantee Contract |
| title_sort | model of distributor chain financing based on buy back guarantee contract |
| url | http://dx.doi.org/10.1155/2014/902739 |
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