Optimal Stackelberg strategies for supply chain financing with credit limits

In this paper, we research the optimal strategies for supply chain financing system with a capital-constrained retailer under the demand uncertainties. We design a supply chain financing system composed of a manufacturer, a retailer and a commercial bank and formulate a Stackelberg games model in which the manufacturer acts as the leader. Considering the credit line and bankruptcy risk of the retailer, we analyzed the optimal orders of the retailer and the optimal wholesale price of the manufacturer, respectively. We make comparison analysis for the optimal strategies between the loan scheme with the credit line and without it. Finally, we analyze the impacts of different credit lines on the optimal strategies through the numerical examples and validate the theoretical analysis.