The Impact of Financing Model on Newsboy Retailer Operating Strategy

Two stage supply chain with one retailer and one supplier were considered and the retailer’s optimal order was analyzed with capital constraint under stochastic demand. Inventory financing was regarded as the impact of external financing and trade credit as the internal financing. The financing model will affect the optimal order quantity of the retailer. We established profit model of retailers and solved. Mean while, profit functions of the retailer and the supplier were given respectively. Finally, the impact of the retailer’s own funds was investigated on the retailer’s order quantities, retailer’s profit, supplier’s profit, as well as the impact on the overall profit of the supply chain.