Financial Decision-making Research For Logistics Enterprise Based On Prospect Theory

With the rapid growth of logistics enterprises by their quantity and scales, more and more attentions have been paid to the financial problems of logistics enterprises, for example, investment and financing. The traditional financial decision-making theory is based on Expected Utility and has some limitations. Prospect Theory provides a good thought and means to modify Expected Utility, clarify the financial decision process, and control the financial risk. In order to increase the competitive power of logistics enterprises, and insure the healthy development of logistics enterprises, the financial problems of logistics enterprises are thoroughly studied based on Prospect Theory in this paper.This article consists of six chapters.Chapter 1, Introduction: The writing background, purpose, significance and the research status at home and abroad are explained as well as the contents and thinking of the research.Chapter 2, The analysis of basic finance theory of logistics enterprises: The meanings, classification, process and methods of logistics enterprises financial decision are introduced. The current problems of logistics enterprises financial decision are pointed out. It puts forward Prospect Theory to solve these problems.Chapter 3, Prospect Theory and the analysis of its influences on financial decision: The main viewpoints, analyzing methods, decision process and models of Prospect Theory are dissertated. The influences on financial decision are also expatiated.Chapter 4, The improvement of financial decision method of logistics enterprises based on Prospect Theory: The decision indexes and process of traditional logistics enterprises finance are improved by Prospect Theory. It introduces psychological variable to revise Basic Discount Rate, Net Present Value and Internal Rate of Return, and uses Value Function and Weight Function to improve the decision method.Chapter 5, Financial decision case of logistics enterprises: The improved decision method based on Prospect Theory has been applied to a real logistics enterprise case. The different situations (before benefit, from start and after loss) are calculated and compared. The difference between Prospect Theory and Expected Utility and its reason are analyzed.Chapter 6, This is the last chapter, summary is made about the work of the paper , with the shortage of the research sumed up and pointed out.Then we get the contents and direction for the next work.