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Supply chain financing mechanism with guarantee insurance
Author(s) -
Yu Xing,
Chen Huaizhe,
Xiang Kongzhuo,
Wan Zhongkai
Publication year - 2021
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.3236
Subject(s) - bankruptcy , business , finance , trade credit , revenue , supply chain , capital (architecture) , capital structure , mechanism (biology) , actuarial science , debt , marketing , philosophy , archaeology , epistemology , history
This paper designs a bankruptcy guarantee insurance contract for a capital constrained retailer who can choose two financing ways of trade credit and bank credit. Different from the existing research, we introduced a third party insurance institution to undertake the loss of the retailer in bankruptcy. Under the two financing mechanisms, we present the optimal decision for each subject and analyze the influence of each parameter on the decision making and the revenues. The results facilitate scientific policy development and provide a reference for promoting finance sourcing operations in a supply chain.