Decision-making of supply chain finance, based on inventory financing procedure under default risk and market risk

Shiying Chen, Tomohiro Murata

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Limited working capital is a frequent constraint in corporate procurement decision. However, small size and start-up firms often have difficulty accessing financing from banks directly, due to their lack of guarantees. In this case, Supply Chain Finance (SCF) is undoubtedly a good choice as a means of substituting for lower credit availability. For the purpose of reducing loan risk and increasing expected return of bank when implementing SCF, this article studies inventory finance model and build an optimization mathematical model. Furthermore, this article does series sensitivity analysis on key parameters such as default probability and the market price of collateral by simulating. The result shows that inventory finance can extend credit to downstream enterprise and benefits all members of the chain.

Original languageEnglish
Title of host publicationIMECS 2016 - International Multiconference of Engineers and Computer Scientists 2016
PublisherNewswood Limited
Pages882-885
Number of pages4
Volume2
ISBN (Electronic)9789881404763
Publication statusPublished - 2016
EventInternational Multiconference of Engineers and Computer Scientists 2016, IMECS 2016 - Tsimshatsui, Kowloon, Hong Kong
Duration: 2016 Mar 162016 Mar 18

Other

OtherInternational Multiconference of Engineers and Computer Scientists 2016, IMECS 2016
CountryHong Kong
CityTsimshatsui, Kowloon
Period16/3/1616/3/18

Keywords

  • Default risk
  • Expected return maximization
  • Inventory finance
  • Market risk

ASJC Scopus subject areas

  • Computer Science (miscellaneous)

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  • Cite this

    Chen, S., & Murata, T. (2016). Decision-making of supply chain finance, based on inventory financing procedure under default risk and market risk. In IMECS 2016 - International Multiconference of Engineers and Computer Scientists 2016 (Vol. 2, pp. 882-885). Newswood Limited.