Advanced-payment Model Of Supply Chain Finance: Financing And Operation Decisions

Supply Chain Finance (SCF) is a series of new finance products to solve the difficulty of financing which small and medium-sized business face, a promising mean to upgrade services of logistics enterprises and a useful tool to improve value of the whole supply chain. Thereby it is getting more attention in both the industrial and academic filed. This research mainly focuses on the operation mechanism, risks and operation decision of partners of SCF.Firstly, the article conducts a qualitative investigation of SCF models. By dividing the SCF into three models, Advance Payment Financing (APF), Inventory Financing (IF) and Accounts Receivable Financing (ARF), the article has a specific research to each model from demands, mechanism, benefits and risks of partners, compares the differences and summarizes the common characters of SCF models. SCF risk is given more focus. This article divides it into market risk, credit risk, operation risk and legal risk and points out the risk origins and factors.Secondly, this article has a quantitative research on APF model which is a representative model of SCF. Considering the risk factors, the author bases the modeling on supply chain contract models, compares difference between financial supply chain and the traditional supply chain, and studies the decisions of partners in a decentralized SCF under a Stackelberg Game. The results demonstrate that the benefit of financial supply chain is more than that of the traditional supply chain with a capital constraint.Finally, the article uses a case study to illustrate and test the preceding models. The case is from a research survey and adjusted to modelling. Through numerical calculation, this part illustrates how to use the model to support decision-making activities and at the same time the results verify the conclusions of the model.The research of SCF risk identification, classification and risk characters in this article enriches the empirical study of SCF. Moreover, it is an innovation that use supply chain contract model combing market and credit risk factors to research on financing and operation decisions of APF model. This article provides decision-making support for financial institutions, upside and downside members of supply chain.