Research on the Financing Strategy of Small, Medium and Micro Manufacturing Enterprises in the Environment of Output Uncertainty

Li Yang; Yonglong Wang

doi:10.54097/jid.v5i1.02

Authors

Li Yang
Yonglong Wang

DOI:

https://doi.org/10.54097/jid.v5i1.02

Keywords:

Supply Chain Financing, Risk Aversion, Green Technology Input, Capital Constraint

Abstract

Small and medium-sized enterprises often face the risk of uncertain output. We considered a supply chain system composed of a single risk-neutral retailer and a single risk-averse manufacturer. When manufacturer is faced with capital constraints in the production of green products, they can solve it by external financing to third-party financial institutions or internal financing to retailer. At the same time, the retailer can determine the expected order quantity according to the market demand, the wholesale price and the green technology input level of the manufacturer. Based on these, we construct three game models: no financing model, external financing model and internal financing model, and study the financing strategy of manufacturer and the ordering strategy of retailer. The results show that the manufacturer's profit is the largest when producing green products. At this time, both internal financing and external financing are optimal financing decisions for the manufacturer. However, the retailer 's optimal ordering strategy is when only green products are sold and the manufacturer conducts internal financing.

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