An Investment and Loan Financing Decision Equilibrium in Supply Chain

An Investment and Loan Financing Decision Equilibrium in Supply Chain

Ya Zhou
DOI: 10.4018/IJISSCM.304090
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Abstract

A financing model for bank loan financing, equity financing, and portfolio financing under the manufacturer's capital constraints is constructed, and the manufacturer's capital level and consumers are discussed in green preference on pricing, green input level, market demand for products, and selection strategies of financing methods. Finally, it is verified by numerical analysis. Consumers' green preference is positively correlated with retail prices, wholesale prices and the level of green investment efforts, market demand for products, and equity transfer ratios acceptable to both parties in equity financing; when the manufacturer's capital constraints are not financing, the manufacturer's initial capital level is positively correlated with manufacturer's wholesale price, and retailer's retail price are negatively correlated, but it is positively correlated with the level of green investment efforts; the greater the bank loan interest rate, the larger the manufacturer's acceptable share transfer ratio.
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1. Introduction

With the rapid development of human society and economy, it has also brought some threats to mankind, such as lack of resources, environmental pollution and climate warming (Zheng Y., Hu F., & Xu Y. J.,2012). As a result, people began to reflect on the social and economic development model. As the concept of “green” and “low-carbon” development gradually became popular, creating a sustainable, environmentally friendly and resource-saving society has gradually become the common development target in the whole society (Zhu Q. H., & Cote R. P., 2004). With the deepening of consumers' awareness of environmental pollution and consumers' demand for green products increases, the green production of enterprises can not only obtain more benefits, but also obtain better reputation and competitiveness (Srivastava S. K.,2007). Companies have joined the green production plan (Wati Y., & Koo C.,2010;Dai Y. S.,2011). BBMG's (BBMG is a branding and social impact consultancy in NYC and San Francisco, https://bbmg.com/) consumer report shows that 51% of Americans are willing to buy green products at a higher price, and 67% regard the environmental performance of the product as a determinant of whether to purchase or not (Bemporad R., & Baranowski M.,2020). The manufacturer can sell products to customers either through a direct marketing channel or through a traditional retail channel. The level of advertising investment and supply chain profits of centralized and decentralized dual-channel supply chains are analysed based on a Stackelberg game (Zhang X. M., et al, 2021). Then, the decision models of dual-channel supply chain under different contracts are constructed, and how manufacturers can optimize the profits of both sides through an effective coordination mechanism is analyzed. In determining long and short-term success of many companies, demand forecasting with maximum accuracy is absolutely critical to invest in various ðelds, which places the knowledge extract process in high demand. A hybrid approach of prediction into a demand forecasting process in supply chain is proposed based on the one hand, on the processes analysis for best professional knowledge for required competencies (Brahami M., et al, 2022). And on the other hand, the use of different data sources by supervised learning to improve the process of acquiring explicit knowledge, maximizing the efficiency of the demand forecasting. The establishment of online direct sales channels influences the selection of pricing strategies and promotion information disclosure strategies of manufacturers and retailers. The influence of different promotion information disclosure modes on the promotion effect and the income of supply chain members in the dual-channel supply chain with direct online channels are studied (Duan Q., & Li C. C., 2021). Based on hoteling model, the authors establish a model on market demand of the two channels and analyze the pricing and disclosure strategies of manufacturers and retailers under different concerns of consumers. It is found that there is a unique equilibrium threshold between the two disclosure modes. The corporate financial constraints has also become the focus of common concern in the business community and academia. This article does some research of investment and financing on green supply chain, so that each main body on the green supply chain can find a suitable way of investment and financing.

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