Sales promotion and supply chain finance for shopping days: Strategies of e‐commerce platform and seller

Abstract

AbstractIn shopping days, e‐commerce platforms (ECPs) and their sellers cooperate to promote sales through price discount and marketing effort. Supply chain finance (SCF) has been offered by ECPs to fuel sellers' preparations for shopping days. An ECP‐seller supply chain (PSSC) model is constructed to study the strategic interaction between the ECP and the seller. Given a price discount rate, we derive the ECP's optimal marketing effort level and feasible SCF service rule, as well as the seller's optimal supply quantity and financing decisions. Furthermore, we identify a price‐discount‐rate interval, in which the Pareto improvement of the PSSC can be achieved.