Abstract: In the case that the pledge is a type of consumable item, the contract selection of encouraging a logistics company by a bank in inventory financing business is studied. Considering that the level of effort affects the loss of pledges, a model of Stackleberg competition game is constructed. By comparing the expected profits of the bank and the logistics company under the three business models of joint operation, entrusted supervision and unified credit, the contract choices of the bank in the case of the loss of pledges, and the impact of the logistics company' effort cost coefficient, and pledge and item loss rate on contract selection under different contract models are explored. It is shown that the bank should choose the joint operation mode when the logistics company's effort cost coefficient is small, and consigning supervision mode when the loss rate of the goods is small, in other cases, the bank should choose the unified credit mode cooperating with the logistics company and set smaller pledge rate.

Key words: inventory financing, loss of pledged goods, contract selection