Joint Production And Financing Decisions Of The Manufacturer Based On Pharmaceutical Supply Chain Accounts Receivable Financing

In China, due to the lack of fixed assets, guarantee mechanism and credit risks, it is generally difficult to get loan from bank for most of the small and medium sized pharmaceutical enterprises, so most of them are facing the problems of production capital shortage and financing difficulties. Despite owning a large scale of inventory and accounts receivable receipts, pharmaceutical manufacturers, are faced with difficulties and risks when implementing inventory financing business due to the special properties of pharmaceutical products, such as drug safety, timeliness and harsh storage conditions. Supply chain accounts receivable financing is a model that enterprise uses its own accounts receivable receipts signed with the core enterprise under a real business background. Compared to traditional financing, the advantage of supply chain accounts receivable financing is the lower credit and operability risk, and the ability to ease the strait financing situation, accounts receivable financing has become one of the most important means of supply chain finance.In a pharmaceutical supply chain, the retailer is in the dominant position. This paper uses expanded newsboy model and game theory as the main research tools to quantitative analyze supply chain finance accounts receivable financing mode in an uncertain market demand which depends on the price. Based on the accounts receivable financing operational process, this article establishes the earnings model of the manufacturer and retailer under the financing constraints, and concludes the best production and financing decisions of the manufacturer. Then this paper highlights the outstanding advantages of the accounts receivable financing compared with no financing decisions. Then under the condition of incomplete information, this paper establishes a Stackelberg game model between the financing manufacturer and bank, and obtains the game balance decisions under different financing models. The results shows that the receivables pledge rate, the amount of accounts receivable, funding rate, funding duration, default loss are affecting the financing decisions on both sides. At last, this paper prove the correctness of the production and financing decisions model by the instance of a pharmaceutical company’s case, which provides financing decisions references for the small and medium sized pharmaceutical companies and banks in the accounts receivable financing business.