Optimal decisions in a capital-constrained supply chain under credit guarantee and revenue-sharing contracts

This study proposes a novel Supply Chain Finance scheme (CG-RS), integrating credit guarantees (CG), and revenue-sharing contracts (RS). We analyze a three-party Stackelberg game between a capital-constrained retailer, supplier, and bank. We derived equilibrium strategies under both monopolistic and competitive bank markets to investigate the impact of the CG-RS scheme on the financial performance of each party. From the numerical analysis, we find that all parties can benefit from the CG-RS scheme by mitigating default risk and aligning incentives. The supplier’s guarantee coefficient and the retailer’s initial capital significantly influence the scheme’s outcomes, while the revenue-sharing proportion plays a crucial role in balancing interests. Our findings suggest that the CG-RS scheme offers a promising solution for addressing capital constraints and enhancing supply chain performance.