Dual-channel supply chain operations with working capital constraint: constant vs increasing marginal costs
Zhuang Xiao, Yixiang Tian, Zheng Yuan
Available Online October 2017.
- https://doi.org/10.2991/febm-17.2017.28How to use a DOI?
- supply chain; dual channels; operational capital constraints; marginal cost
- This paper builds a two-stage game model to capture the operations of a dual-channel supply chain consisting of one supplier and two retailers where one of the retailers is constrained by its working capital and the other is not. With this model, we identify the different effects of the capital constraint on the operations of the supply chain and the corresponding profitability in two different (production) technological settings where the marginal cost is constant and increasing respectively. The results show that (1) in the case of a constant marginal cost, the unconstrained retailer's operations and its profitability are independent of the constrained retailer's working capital, while in the case of an increasing marginal cost, the constrained retailer's working capital have a negative impact on the unconstrained retailer's ordering quantity and profitability; (2) the impact of an change in such working capital on the constrained retailer's operations and profitability is regardless to the feature of the marginal cost; (3) in both setting, the supplier and the constrained retailer benefit from an increase in the constrained retailer's operational capital;(4) in the case of an increasing marginal cost, this produces a conflict between the constrained and the unconstrained channels. Managerial insights are also discussed.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Zhuang Xiao AU - Yixiang Tian AU - Zheng Yuan PY - 2017/10 DA - 2017/10 TI - Dual-channel supply chain operations with working capital constraint: constant vs increasing marginal costs BT - Second International Conference On Economic and Business Management (FEBM 2017) PB - Atlantis Press SP - 215 EP - 225 SN - 2352-5428 UR - https://doi.org/10.2991/febm-17.2017.28 DO - https://doi.org/10.2991/febm-17.2017.28 ID - Xiao2017/10 ER -