Decision-making Model Of Credit Sale Based On The Estimated Probability Of Business Opportunity

The substitution among the homogeneous product or the old and the new generationproduct all have an influence on the product sale. It also makes the customer corresponding tothe product lost easily. Therefore, the credit sale as an effective strategy to retain thecustomers and increase sales was gradually adopted by the enterprise. In the specificdecision-making process, the company has the ability to make a more accurate assessment onthe credit risks and benefits. But with the risk of the business opportunity lost at anytime, it isvaluable to weigh the credit sale risk and gains only in the premise that fully grasps thebusiness opportunities. Thus, it is full of significance to conduct an accurate assessment onthe business opportunity for the enterprise.Firstly, the article constructed a model of the probability estimation on the existingbusiness opportunities. Based on the idea of the SMC model that forecasted the transactionrelationship between the enterprise and the customers dynamically, the model chose theWeibull function to fit the characteristics of the customer life-time when the products enteredrecession. Secondly, according to the result of the assessment on business opportunities, it canidentify different types of customers; give corporate a guide to choose research method andarrange research time accordingly; and apply the revenue estimation methods anddecision-making rules to construct a dynamic credit sale decision-making model. The modelcan estimate total revenue of the different types of the customer at different stages, so thatenterprise can target different types of customers to make optimal decision in the limited time.Finally, we used the linear estimation method in previous study to estimate the probability ofthe business opportunities existed, carried out the research and make credit-sale decision. Incontrast to the model newly constructed, it concluded that: The accuracy of the businessopportunity have an influence on the arrangement on research time and the choice of researchmethods directly, which affect the customer credit level indirectly, thus result in the deviationof the final decision. Compared with the SMC model which combined with exponentialfunction and gamma function to fit the customer life-time, the business opportunitiesestimation model used the Weibull distribution function which portrayed the customerlife-time varying trend more accurately and effectively overcame the defects of the originalSMC model, such as a high degree of computational complexity, poor adaptability.