—In this paper, we design a supply chain finance system composed of a capital-constrained retailer, a manufacturer and a commercial bank, with unknown demand distribution. Considering the retailer’s capital-constraint degree, credit line and bankruptcy risk, we establish a Stackelberg game in which the manufacturer acts as the leader and the commercial bank as the sub-leader. Based on the profit-maximization objective, we solve the optimal order of the retailer, the optimal interest rate of the commercial bank and the optimal wholesale price of the manufacturer and the robust deviation for each participant based on minimize-maximum-regret. Finally, we conduct numerical examples to make a comparative analysis between these two different decisions and explore the impact of the demand uncertainties on optimal strategies and robust deviations. It concluded that the robust decision provides a conservative strategy for risk aversion and the region of demand intervals has great impact on robust deviations, rather than the optimal decisions.
—Supply chain finance, robust optimization, Stackelberg games, demand uncertainty.
Nina Yan is with the Central University of Finance and Economics, Beijing, 100081, P.R. China (e-mail: yannina@ cufe.edu.cn).
Cite: Nina Yan, "Robust Decisions of Capital-Constrained Supply Chain with Demand Uncertainty," International Journal of Modeling and Optimization vol. 4, no. 3, pp. 220-226, 2014.