Research On Internal Financing Strategy Of Supply Chain Based On Investment Opportunities

With the development of economic globalization,competition among enterprises shift to the competition among the supply chain, but the business of the supply chain, especially SMEs, exist the issue of financing difficultly,then trade credit came into being,it not only can ease the financial pressure, but also can stimulate the purchasing power of retailers to improve the supply chain's overall profit. Simultaneously it also breed many problems,such as suppliers of other investment opportunities will not supply trade credit to relailers;when retailers have other investment opportunities,they will divert the trade credit to other project contract,it will result great loss to the entire supply chain.This study mainly consider single-cycle demand, in the presence of other members of the investment opportunities in the supply chain, retailers purchase from a single supplier of single product, then sold in the market, suppliers are willing to supply trade contracts for retailers. First,this study established one trade credit financing model of suppliers having investment opportunities to study retailers' optimal order decision and supplier's order quantity limit,further analysis the relationship between retailers' optimal order decision and supplier's order quantity limit,then established one trade credit financing model of retailers having investment opportunities,supplier supply a trade contract to prevent the transfer of financing,and the relationship between trade contract and internal capital,investment opportunities,after studying,we know the following conclusions:(1) there are other investment opportunities for the suppliers: The supplier of the high cost of investment opportunities, when retailers exists capital constraint, suppliers supply trade credit to retailers,simultaneously in order to prevent over-order,supplier will set the limit payment,the researchers found that the greater the retailer's internal capital, the higher limit set by the supplier.So the limits supplier set for retail that has little internal capital,on the other hand,the more internal capital the retail has,the supplier will get more profit.Interestingly, when the retailer's internal capital equal to this thresholdvalue, retailer's the optimal order quantity is suppliers' optimal production under centralized decision-making,the profit of the supply chain to the max, then the supply chain to the coordination. In addition, the greater suppliers' investment opportunities, the higher the profit of the supply chain, to ease the financial pressure on the entire supply chain members.(2) other investment opportunities for retailers situation: the greater the investment opportunity of retailers, suppliers require retailers to have a relatively large internal capital to get trade contract,simultaneously suppliers will supply a lower trade contract.when retailer has a lower internal capital,supplier will set a limit to prevent retailers' moral hazard, retailer contract interest rate increases internal capital increases, if the supplier does not restricte,the retailer's profit will be a corresponding decrease,as compared with moral hazard,because retailers' internal capital is insufficient to divert investment to other projects,; when the retailer's internal capital is more,supplier will supply a credit contract which is less than the theory trade credit,andthe interest rates is increased with retailers' internal capital.