Enterprise’s Ordering Decision-Making Model For Different Financing Modes

Chinese small and medium-sized enterprises have difficulties in borrowing and financingbecause of small scale, poor ability to resist risks and little sense of credit. Therefore, they areshortage of capital. Their operation decisions are affecting by financial condition deeply.Enterprise’s financial condition and ordering policy are affecting by internal financing ofsupply chain (trade credit), capital constraint and external financing (inventory financing)from the research of enterprises and scholars. However, there’re less studies including thosefactors influenced the ordering policy.In this paper, we set up the models about enterprise’s ordering policy considering tradecredit, capital constraint and inventory financing (warehouse receipt financing for supplierand factoring financing for retailer).We set five action policies in models. The enterpriseshould decide when to pay and order cycle. The object is the cost minimized. We provide theoptimal ordering decision among different policies and also the best selection of policies indifferent situations for enterprise.Numerical examples about supplier&retailer’s decision are provided to show that thecapital constraint and credit period are the key factors influence the ordering decision. Somemanagement guidance is provided.