Financing&Operation Decision-making Research On Semi-centralized Steel Supply Chain

As a capital-intensive industry, the steel industry focuses on the problem how to financing scientifically all the time. Especially in recent years, the fraud cases caused by the steel trade enterprises appeared frequently in the steel supply chain financing, which led to the losses and prudent lending of banks. And the needs of doing researches on the financing scientifically&operating effectively have become more urgent than ever. To aim at the problem that the bank and the logistics enterprise can’t cooperate well, LS Group launch a new management attempt. LS Group take advantage of LS Financial Company’s preponderance and LS Property Group’s strength, and LS Financial Company act as the role of banks, while LS Property Group assume the function of the logistics monitoring and business operations. Then the management of LS Group make a unified decision instead so as to solve the inefficiency of the supply chain financing brought by the decentralized decision-making. This paper aims to study the financing and operation decision-making problem in the management practice of LS Group, set up the theory model for two purposes:on one hand, analyze the steel supply chain’s financing decision when one Group act as a semi-centralized organization, on the other hand, explore the coordination and operation decisions of the supervision business between the management of one Group and its internal sub-groups.First of all, the concepts of the decentralized, centralized and semi-centralized steel supply chain are shown in this paper. Through qualitative comparison, the semi-centralized steel supply chain is supposed to be more efficient than the decentralized steel supply chain, and more practicable than the centralized steel supply chain. Then this thesis analyze the decision-making problem of the steel supply chain financing based on replacement purchase, and the optimal wholesale price and order quantity of Stackelberg game between the semi-centralized organization and the loan enterprise have been carried out. When the market demand follows the uniform distribution, the conclusions are proved, that the loan enterprise is reluctant to participate in the supply chain financing business under some certain condition, and that the default probability of the loan enterprise will increase along with the wholesale price. The numerical examples show that:With the improvement of the regulation efficiency, the default probability of the loan enterprise will reduce, while the output of the regulation will increase.Next the paper uses the principle-agent theory which concerns multi-principals to analyze the operation problem on the control of regulation efficiency within the semi-centralized organization. The management of the semi-centralized organization is the principal, while the logistics service provider and the capital provider both are the agent. Under the condition of asymmetric information, the incentive contract is designed and the optimal levels of the two agents’efforts of Nash equilibrium are solved. Theoretical results and the numerical examples both display that:the levels of the two agents’regulatory efforts are negatively related to the degree of the agent’s risk aversion, the volatility of the external market and the cost coefficient, while it is positively related to the incentive intensity, the output per unit of effort and the cost coefficient.