Research On Inventory Financing Decisions-making Based On Entropy

With the development of inventory financing, the types of collateral is also increasing, characteristics of some collateral makes the market demand is uncertainty, the credit lines of bank is more difficult to control, which leads to inventory financing theoretical study under incomplete information lags behind the development of practice, the development of practice needs theoretical guidance. In addition, the competition model between enterprise and enterprise would not exist, replaced by the competition model of supply chain and supply chain which based on the principle of mutual benefit. Balancing the interests of all parties could be an important factor affecting the inventory financing lasting and stability development. Therefore, the study of decision model and the coordination of the supply chain in inventory financing can promote the development of the theory. It also has great significance in guiding the practice of inventory financing. Some problems have been solved in this study.Firstly, the basic model of inventory financing is established, the maximum entropy criterion is applied to predict the distribution of demand under incomplete demand information, where only the mean and standard deviation of the demand are known. The forecast of the demand distribution is the foundation of calculating pledge rate and bank profit in inventory financing under incomplete information. The result of comparing the assumption of uniform distribution and normal distribution shows that the maximum entropy criterion can be well applied to the market distribution which is the normal distribution condition.Secondly, the value of information and decision-making on the inventory financing is discussed. This paper takes the two stage supply chain consisting of a single supplier and a single retailer as the research object, analyzes the decision problem under complete information and incomplete information respectively: complete information-decentralized supply chain, complete information-centralized supply chain, incomplete information-decentralized supply chain and incomplete information-centralized supply chain. The results show that the retailer’s centralized decision is always better than a decentralized decision-making no matter what is the condition of information. With the increase of the coefficient of variation, the value of information and decision-making will be greater for inventory financing.Finally, it studies the issue of coordination for inventory financing under incomplete information. Considered the influences of shortage cost, the optimal order quantity and the optimal expected profit of supply chain under centralized decision-making and decentralized decision-making are calculated respectively, And then to coordinate the supply chain through revenue sharing contracts and option contracts. Numerical examples show that the profits of retailer, supplier and the whole supply chain can be improved by revenue sharing contracts and option contracts, there by achieving supply chain coordination.This paper is an attempt to apply the information theory to inventory financing. It solves the problem of inventory financing under incomplete information, and also expands the scope of the application of information theory.