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4th European International Conference on Industrial Engineering and Operations Management

A Supply Chain System with Capital Constraints Considering Various Salvage Values

Songman Wu , Felix Chan & S.H. Chung

Publisher: IEOM Society International

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Track: Supply Chain Management

This paper examines the effects of positive or negative residual values on the supply chain participants’ decisions. The supply chain consists of a cash-strapped manufacturer, a reputable retailer, and a financial institution. Two financing tools are considered to address the manufacturer's financial difficulties. It is found that, firstly, positive and negative residual values affect the optimal order quantity. Secondly, residual values have an impact on the profits of each supply chain member. The threshold value of the retailer's internal asset level is related to the residual value under the condition of single financing equilibrium. Finally, the results are verified by some numerical experiments.

Published in: 4th European International Conference on Industrial Engineering and Operations Management, Rome, Italy

Publisher: IEOM Society International
Date of Conference: August 2 -5 , 2021

ISBN: 978-1-7923-6127-2
ISSN/E-ISSN: 2169-8767