HighlightsWe consider a supplier-retailer channel.Providing trade credit to customers incurs default risk.Credit period, big-data analytics effort, and order size are decisions.Supplier or retailer can use big-data analytics to mitigate default risk.Identify the party that should implement big-data analytics in the supply chain.
AbstractThis paper considers a supplier–retailer channel in which providing trade credit to customers incurs default risk. Big-data analytics (BD-A) could be used to mitigate default risk. The aim is to identify the party that should implement BD-A in the supply chain. Our results indicate that when the retailer (supplier) is dominant in determining the credit period, the retailer (supplier) prefers to implement BD-A unilaterally if the optimal BD-A effort is higher than a threshold. The credit period, quantities ordered, and BD-A effort increase when BD-A effort cost is shared.
Managing default risk under trade credit: Who should implement Big-Data analytics in supply chains?
2017-08-26
18 pages
Article (Journal)
Electronic Resource
English
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