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Purchase Order Financing: Credit, Commitment, and Supply Chain Consequences
2018
Operations Research
We study a supply chain where a retailer buys from a supplier who faces financial constraints. Informational problems about the supplier's demand prospects and production capabilities restrict her access to capital. By committing to a minimum purchase quantity, the retailer can mitigate these informational problems and expand the supplier's feasible production set. We assume a newsvendor model of operations and analyze the strategic interaction of the two parties as a sequential game. Key
doi:10.1287/opre.2018.1727
fatcat:a3waqk52kzdj5gwvjw7orqjv6i