Optimal Financing Strategies in Green Supply Chain Finance: A Mathematical and Empirical Study

¹ Hosei University, Tokyo, Japan
² Macau University of Science and Technology, Macao, China
³ Jiangxi Ganbo Taxation Firm, Jiujiang, China
⁴ UCSI University, Lumpur, Malaysia

^* Corresponding author: wei.zhou@lpunetwork.edu.ph

Abstract

Green Supply Chain Finance (GSCF) has emerged as a crucial tool for promoting environmental sustainability while ensuring financial efficiency within supply networks. This paper develops a mathematical optimization model to determine optimal financing strategies for suppliers under a green credit regime, where financing terms are contingent on their environmental performance. We present a detailed, step-by-step construction of the model, designed to maximize the overall profitability of the supply chain. Through a numerical simulation, we demonstrate how the model functions as a decision-support tool, illustrating that financing schemes rewarding green performance can significantly enhance supply chain profits. The findings offer theoretical insights into integrating environmental objectives into financial modeling and provide a practical framework for strategic decision-making in sustainable supply chains.