Abstract: The decision-making of RFID adoption and the financing strategies in a supply chain with a manufacturer and a capital-constrained retailer, who faces inventory misplacement problem is investigated in this paper. Four scenarios of trade credit financing or bank financing without/with RFID technology through the Newsvendor model are considered. The corresponding optimal profits under different scenarios are derived, and then the equilibrium strategies for RFID adoption and financing of the supply chain are explored. It is found that the capital-constrained retailer can obtain more funds from bank financing, whereas the retailer is more willingness to choose trade credit financing as the initial capital decreases. When the retailer's initial capital is moderate, the retailer prefers trade credit financing to bank financing if the misplacement rate increases or the RFID cost decreases. Furthermore, bank financing may alleviate the retailer's inventory misplacement problem.

Key words: capital-constrained retailer, RFID, trade credit, bank financing, equilibrium strategies