Optimal channel strategies in a supply chain under green manufacturer financial distress with advance payment discount.
Chong Zhang;Yaxian Wang;Peng Ma
Nanjing Univ Posts & Telecommun, Sch Management, Nanjing 210003, Peoples R China.
Nanjing Univ Informat Sci & Technol, Sch Management Sci & Engn, Nanjing 210044, Peoples R China.
channel strategies;capital constraints;green supply chain;advance payment financing
INTERNATIONAL TRANSACTIONS IN OPERATIONAL RESEARCH
National Natural Science Foundation of ChinaNational Natural Science Foundation of China (NSFC) ; Philosophy and Social Science Fund of Education Department of Jiangsu Province [2017ZDIXM127]
Green manufacturers are always faced with capital constraints in reality, while the previous literature has shown that internal financing is more effective than external financing. Given manufacturers' financial constraints, this paper studies and compares the optimal green decisions and profits under single-channel or dual-channel strategies with and without green investment. Therefore, the main contribution of the paper is determining the optimal channel strategy of supply chains under advance payment financing. The results indicate that the retailer's optimal channel strategy is to provide advance payment financing to the manufacturer who introduces online channel and produces green products, which are beneficial to the economic and environmental performance. Besides, green investment can facilitate a win-win scenario if the price elasticity of the demand for the retail channel is smaller than a threshold. Furthermore, green investment increases the retailer's acceptance of online channel. The results of our research can provide decision support for decision makers under the advance payment financing.