A Study On Decisions Of Confirming Storage Financing In Supply Chain

Supply chain financing is a model which is also an agreement reached by financial institutions and core business, a systematic financing for SMEs of supply chain. SCF is an innovative financing which can fundamentally relieve the liquidity constraint of core business, improve the cash flow of the small and medium suppliers and distributors, effectively improve the overall stability and efficiency of the supply chain. The paper changes the former financing structure, analyzes the risks and credit issues in confirming warehouse financing, proposes a financial service models and a series of decision-making methods, to search for new financial channels and to provide references for the whole financing decisions of supply chain. The paper focuses on such issues from the following aspects:First, the article generally analyzes the values of SCF to banks and SMEs, actively explores the background and superiority of Confirming Storage Financing models in self-liquidating financing, puts forward two models including tripartite confirming storage financing and quartet models in which the TPL is one of the members.Then, the article reveals the sources of risk in confirming warehouse financing, puts forward the issues including identification, measurement and share of the risk in confirming warehouse business, designs a credit evaluation index system of main body of confirming warehouse financing that is geared to the needs of bank, builds a credit evaluation model for confirmed warehouse business, designs a corresponding algorithm to reasonably determine the credit rating of the main body of the confirming business financing.Next, this article quantitatively analyzes the relationship between distributor’s order quantity, manufacturer’s pricing and the interest rate of financial institutions in the confirming warehouse financing business with three parties involved, establishing a single cycle model of supply chain that is composed of a core enterprise (supplier or manufacturer), two financing enterprise (dealer) and financial institutions. By analyzing the risk of the fluctuations in demand and manufacturers default risk, this paper discusses the decision-making process when manufacturer and distributor place the order and make a price and financial institutions adjust the interest rate, and compares the differences in overall efficiency of the supply chains when the financial institution are providing financing service to its customers selectively.The final stage of the study, by using case analysis, this article compares the differences in overall efficiency of the supply chains when financial institutions do not provide the confirming warehouse service, to provide the service to one distributor, and to provide the service to two distributors respectively. Finally, it is concluded that only when financial institutions provide the service to two distributors at the same time can the supply chain achieve the largest overall efficiency.