Self-liquidating credit chain financing considering the retailer´s fairness preference(October 2014)

The supply chain consists one supplier and one retailer who lacks money. ¹The retailer´s effort level and fairness preference are considered. The study says that the bank´s expected revenue is fixed but the bank interest rate is related to many factors when the financial market is competitive. The ratio of the retailer´s optimal order quantity and effort level increases when the buyback price increases or the risk-free return rate of investment decreases. The retailer´s fairness preference can influence its decision, resulting in the revenue change of the participants in the supply chain further more. The supplier should choose appropriate retailer to improve its own revenue.