Risk Migration In Supply Chain Inventory Financing Service

Zheng Qin, Xiaochao Ding

School of Information Management and Engineering, Shanghai University of Finance and Eco-nomics, Shanghai, 200433, China.
School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai, China.

DOI: 10.4236/jssm.2011.42026                

Abstract

Inventory financing affects the risks of both for banks and supply chain companies. Traditionally, supply chain research focus more on material flow than financial. We construct a supply chain financing risk-information migration model (RMM). In this model, we discussed the preconditions to adopt inventory financing when the enterprises are facing cash constraints. And we simulated the whole operate of supply chain and bank behavior with Matlab. The simulation result shows if loan conditions are satisfied, the total risk value is reduced. Risk migration happens in the financing process. In this process, information-risk proportions are more reasonable.

Keywords

Supply Chain, Inventory Financing, Value of Risk

Conflicts of Interest

The authors declare no conflicts of interest.

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