Based On System Dynamics Million Pregnant Logistics Company's Financial Forecast

It is no longer than twenty years since the emergence of The Third Party Logistics Party in late 1980s. However, research about logistics financial management is still the weak links in the field of Third Party Logistics, which has become the "bottleneck" of a lot of the Third Party Logistics enterprise's operation and development. The currently existing research mainly concentrated on the supply chain management or cost management as well as other partial analysis, lacking of comprehensive research about financial projections and financial operations of the third party logistics enterprise.This paper adopts the system dynamics theory and modeling method to systematically analyze the financial forecast of the third party logistics enterprise called WanHuai Logistics Company. Firstly, on the basis of previous research conclusion, this paper summarized the company's general operation mode and operation process, and analyses the feasibility of adopting system dynamics to solve company's financial projections problems. Secondly, after expound the purpose of the model establishment, determine the system boundary and finds out the important factors in the system as well as the logical relationship between them, this paper is to build model for the company's market, accounts receivable, investment and financing, cost, profit and cash flow, financial indicators as well as other multiple subsystems. It builds company's financial forecast model according to the links between each subsystems. Later, in model's operation simulation part, making use of the company's 2009 financial data, it tests the effectiveness of the model through input of the model parameter. And it simulates the company's earnings and cash flow change trend three years ahead. It compares the simulation results with the practical data of 2010 income statement to test the validity of the model. What's more, it also analyses the sensitivity of the model through analyzing the influence on the profit of the change of the single variables. At the end of the paper, according to forecast of the results, it comes up with constructive suggestions from a financial view for the company's managers'reference.