Research On Core Enterprise Credit Decision By Matching Cost Structures Under Reverse Factoring

With the accelerating process of global integration,supply chain management mode have been gradually recognized and accepted by many companies in the world.Upstream and downstream enterprises in a supply chain are usually the financing bodies.In order to assess the repayment ability of the upstream and downstream businesses,banks always binding with the credit of core enterprise in a supply chain.Therefore,the core enterprise takes the risk of the upstream and downstream enterprises in a supply chain.How to select upstream and downstream enterprises while providing proper financial help to them is very important to keep stability of the entire supply chain.Reverse factoring financing product is to give upstream business liquidity support under the premise of stability.At present,based on reverse factoring mode,the research which cost structure of upstream business effecting core enterprise credit decision is rarely.Therefore,to clarify the relationship between the cost structure of the upstream business and core enterprise credit decision,optimize the function of reverse factoring,is the question which this paper try to clarify.Based on the domestic and overseas researches,this article analyzes different kind of finance products,models and risk factors in supply chain,carries out the research between the cost structure of upstream business and core enterprise credit decision under reverse factoring mode.Through creating data model to quantify the relationship between cost structure and financial demand,the research drawn core enterprise credit decision for different cost structure of upstream enterprises.The study found that the cost structure for different suppliers,in different stages should be given different reverse factoring financing support.Core enterprise in assessing the supplier's funding requirements,should also consider the different background,come to a conclusion of how the fixed costs and variable costs changing the suppliers' cash flow,to provide timely and reasonable reverse factoring financing support to reduce the risk of default.During the period of depreciation,the core enterprise should strengthen a higher proportion of higher fixed costs supplier with financial support.After the end of the depreciation period,the core enterprise should strengthen higher variable cost supplier with financial support.In addition,the cost structure of the model analysis is helpful for supplier choosing the investment proportion of fixed costs.Supplier shall assess market demand prospects,when the need arises,suppliers tend to improve fixed costs proportion to improve the ability of the long-term supply;but when the need declines,the supplier tend to reduce the proportion of investment in fixed costs,while reasonable assess the expected volatility level of variable costs,for the timely transition when changes in market demand.