Coordinating Supply Chain Financing for E-commerce Companies Through a Loan Contract

This paper considers an online retailer and his or her manufacturer, both facing financial constraints wishing to get loans from their e-commerce platform-backed finance company. Based on shared transaction data monitored sales accounts, a tripartite loan contract is proposed coordinate three parties’ actions in this supply chain financing problem. We prove that the aligns decentralized decision-makings of each party duplicates optimal channel performance under fully integrated decision-making framework. A case study then conducted illustrate contract. The result shows outperforms wholesale-price contracts, where coordination does not take place, buyback happens between manufacturer only. Furthermore, sensitivity analysis reveals profit allocations among lender, retailer, resulted are more balanced when cost-to-retail ratio risk premium high.