Research On SME’s Financing Decision:Based On Supply Chain Relationship

With the coming era of supply chain, enterprises competition actually is supply chain competition. The Small and Medium Enterprises (SME) can’t perform the optimal decision due to capital constraint, which inevitably affects the competitive advantage. Using Finance Theory and Method, Operation Research, Economic Theory, Inventory Theory, this dissertation studies SME’s financing cost and financing amount problems. Firstly, in order to deal with the financing amount problem, once the retailer defaults, the supplier will buy back a fraction of unsold products; Secondly, considering the supplier can use option contract to share the demand risk the retailer faces, this paper characters the optimal decisions of three participators, i.e., the retailer, the supplier and the bank, under no information-updated/information-updated situation. Finally, the impact of bank decision on profits of different participators with capital constraint is studied. The last two parts aim on deal with financing cost problem. Specifically, this paper focuses on a supply chain system consisting of a supplier and a retailer who is a small and medium-sized enterprise with financial constraint.This dissertation mainly explores problems from four aspects:1.SME’s financing decision when the core enterprise directly takes part in financing processThis section studies the decision-making problem of the retailer borrowing money by inventory financing under the situation where the supplier guarantees to buy back a fixed ratio of unsold products if the retailer defaults. If demand quantity is less than one threshold point, the retailer uses other revenue to pay back the interest and principle with a certain probability. This section obtains the optimal decisions under two situations:with sold privileges and without sold privileges. Further, this part analyzes the impact of buy-back guarantee and subjective default probability on all participators’ decisions. The results show that:the supplier’s buy-back guarantee not only increases bank’s profit, but also raises the loan-to-value ratio in some cases; when the market conditions are optimistic, the retailer’s financing dilemma can be effectively alleviated by the supplier’s buy-back guarantee.2.SEM’s financing decision without information update when the core enterprise offers option contract to share demand risk.The risk neutral retailer can obtain boundless loan from the risk-averse bank. The supplier provides three types of option to the retailer, that is, call option, put option or bidirectional option. After model establishment and analysis, this part obtains the retailer’s optimal goods and option quantity, supplier’s wholesale price and bank’s optimal interest rate and profit threshold under CVaR risk measurement standards. The results show that, under the three option contracts, the retailer has a unique optimal goods and option ordered maximizing profit. The bank has an optimal interest rate. By adjusting the wholesale price, the supplier can coordinate the supply chain. Moreover, the results of theoretical analysis and numerical simulation show that:under the bidirectional option, the retailer can get the largest order quantity and the biggest revenue. However, the retailer is very vulnerable to go into bankruptcy. Based on comparing the results of these options, considering the risk degree and bank’s risk averse, the retailer can choose a better contract.3.SME’s optimal financing decision with information update when the core enterprise offers option contract to share demand riskSimilar to the background of part2, this section studies the decisions of the bank and retailer under the call option with demand information update. In the first stage, the retailer makes decision of the quantity of goods and option purchased, and in the second stage, i.e., before the sales season, according to the updated demand information, the retailer exercises option. This part obtain the optimal purchased quantity, the threshold point of abandonment option, the threshold point of exercised all option and profit of the retailer. The results show that:the optimal ordered quantity, the cutoff point of abandonment option, and profit of the retailer decrease in the interest rate. The optimal ordered option quantity and the cutoff point of exercising all option increase in the interest rate. The interest rate is affected by the demand fluctuations. Meanwhile, only if the demand and market information distributions are satisfied a certain condition, can the flexible contracting purchase model avoid the part of demand risk, and can the call option contract affect the decisions of retailer and bank.4. SME’s optimal financing decision based on the whole supply chain with financial constraintThis section studies a two-echelon supply chain consisting of a supplier and a retailer, with financial constraint. This is the only marketing channel between supplier and retailer. Without the demand information, the bank makes the interest rate decision by the credit evaluation indexes. In the cases of capital information sharing and capital information asymmetry, every member in the supply chain can modify their own expected gain by the bank’s expected loss. The results show that:in the case of capital information sharing, the risk of loan is only related to the retailer’s loan-default rate, the bank tends to provide loan to the upstream firm. In the case of capital information asymmetry, everyone’s profits are influenced by the initial capital and loan-default rates. With syndicated loans, the supplier and the retailer share the loan risk with each other, the bank reduces the threshold of loan-default, and the retailer’s financing dilemma can be effectively alleviated.This paper focuses on the situations where the core enterprise is directly involved in SME’s financing pattern, the core enterprise offers option contract to share demand risk in the SME’s financing pattern, and all participators are capital constrain. These results will provide feasible financing pattern to small and medium-sized enterprises.