Pricing and Ordering Decisions of China Railway Express Considering Capital Constraint

In view of the financial constraints of small and medium-sized enterprises for China Railway Express, this paper considers the demand characteristics of transportation price and service quality, and develops a two-echelon logistics service supply chain game model which considers China Railway Express and an international freight forwarding agent. The pricing solutions and profit functions are analyzed under four scenarios without financial constraints, with bank financing, China Railway Express financing, and centralized decision. With the goal of maximizing the profit function, this study examines the influence of the freight forwarding agent's initial funds and transportation service quality on the pricing and financing decisions for China Railway Express and the freight forwarding agent, verifies the feasible condition of different financing modes selection, and then performs numerical analysis. The research shows that capital constraints would result in an increase of the transportation price of China Railway Express; the China Railway Express financing mode can provide lower transportation price than bank financing. In the China Railway Express financing, the profits of both parties are significantly affected by the freight forwarding agent's initial funds. Only when the initial funds are less than a certain critical value, both parties would choose the mode of China Railway Express financing. The overall performance of the supply chain under China Railway Express financing is higher than the mode of bank financing. Copyright © 2022 by Science Press.