Risk Migration in Supply Chain Inventory Financing Service
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one period considering the demand forecast for the new
period, which is now available. Therefore, the determi-
nistic formulation next described comprises a set of
planning periods, and only the first one includes the de-
tailed scheduling decisions with shorter time increments.
Such detail period moves as the model is solved in time,
thus the term rolling horizon.
Calculate VaR of both manufacture and bank, then
standardize VaRto [0,1], then we can get
LL L M
VaR VaR VaR
basing on Equation (1) and
(2). Get
by 1
L
, Table 1 shows the typical
data results of several experiments in computer simula-
tion when 01000
m
x、0.10i and '0.06i. With
different initial variables, the bank Va R will decrease
when adopt inventory mortgage, the potential profit is
growing. For the manufacture, after use inventory mort-
gage, VaR is larger than before. The potential income is
growing because bank can offer more loans which reduce
the manufacture shortage of cash, so the manufacture can
produce more to maximum profit.
When the manufacture satisfies 0mm m
qp x and
1
mm
pc i
, accompany with market demand in-
creasing, the VaR of bank decrease because manufac-
ture’s capability of making profit. If using inventory
mortgage, the VaR value for manufacture is increasing
because more cash are put in producing and inven-
tory(Figure 3).
5. Conclusions
We discussed manufacture and retail supply chain struc-
ture which both facing cash-constrain and a bank that
finances the manufacturer. Supply chain inventory mort-
gage must satisfy preconditions of 0mm m
qp x and
1
mm
pc i, that is member of supply chain will use
self-owned capital before using inventory mortgage, and
the cost of loan must less than the profit rate. In inven-
tory mortgage, both bank and manufacture are benefit
because the risk migration. After migration of risk, it is
more compatible with the information shared between
supply chain member and bank. For supply chain mem-
bers, they have more market information than bank in
production operate process, after sharing inventory in-
formation with bank, this reduce the bank shortage in-
formation. So the migration of risk can help optimize the
whole supply chain and bank.
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