Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/327636 
Year of Publication: 
2025
Citation: 
[Journal:] Journal of Innovation & Knowledge (JIK) [ISSN:] 2444-569X [Volume:] 10 [Issue:] 4 [Article No.:] 100741 [Year:] 2025 [Pages:] 1-18
Publisher: 
Elsevier, Amsterdam
Abstract: 
This study examines a supply chain consisting of a capital-constrained supplier and a retailer. The supplier sells wholesale products to consumers through the retailer and may also sell directly to consumers via an online channel. Given that the supplier's initial working capital may be insufficient to cover production, investment, or online channel expenses, they have the option to borrow funds from a bank-a practice referred to as bank credit financing (BCF). We develop models with and without direct selling and BCF to analyze the supplier's optimal decisions regarding cost-reducing investments and the BCF policy. Our findings indicate that, in the absence of direct selling, the supplier's optimal BCF decision depends on its initial working capital and the investment cost factor. Notably, BCF can enable the supplier to shift from forgoing cost-reducing investments to actively engaging in them when the initial working capital falls within a certain range. Furthermore, under the direct selling model, the supplier's optimal decision is influenced by a combination of factors, including its initial working capital, investment cost factor, and direct selling cost.
Subjects: 
Bank credit financing
Cost reduction
Power structure
Supply chain
JEL: 
O32
C72
C78
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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