讲座题目：Value of Insurance in a Capital-Constrained Supply Chain
We investigate the value of financing insurance in a supply chain consisting of one supplier and one newsvendor-like retailer, in which the retailer is capital-constrained and in need of financing from a bank. The bank is risk-averse and sets a loan limit to control its credit risk unless the retailer buys an insurance to cover the risk. The analysis reveals that the supplier will reduce the wholesale price to encourage the retailer to buy insurance and the optimal wholesale price decreases with the fixed premium, which implies that a higher fixed premium might hurt the supplier but benefit the retailer and the entire supply chain. Furthermore, if the production cost is low, the supplier is willing to share a portion of the premium when the insurance is too expensive for the retailer. Although the supplier can benefit from providing a supplier-owned insurance or trade credit, it is shown that the bank credit with third party insurance is valuable in a variety of scenarios.