Wholesale price contract when the retailer's capital constraint is considered
2011
The capital of the retailer is limited. So, the manufacturer should consider the retailer's capital constraint when she decides the wholesale price contract with an imperfect capital market. The business process between the manufacturer and the retailer is thought a Stackelberg game. The mathematic model of expected profit has been found under the framework of the newsvendor model. The whole sale price is connected with the capital and the reserved profit of the retailer. By discussing the model, the optimal wholesale prices of the manufacturer are acquired when the retailer's reserved profit is zero or more than zero.
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