Dual-channel supply chain operations with working capital constraint: constant vs increasing marginal costs

DOI

10.2991/febm-17.2017.28How to use a DOI?

Keywords

supply chain; dual channels; operational capital constraints; marginal cost

Abstract

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.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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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  - Proceedings of the 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  - 10.2991/febm-17.2017.28
ID  - Xiao2017/10
ER  -