Research On Financing Decision Of Capital-constrained Supply Chain On Considering The Influence Of The Economic Cycle

Most of SMEs face capital constraints. Relative to the strict requirements of traditional credit, the flexible operation of supply chain finance solve the financing problem for many enterprises which face capital constraints. The capital constraints affect the profitability and competitiveness of the whole supply chain system and its members. So the well-funded supplier of the supply chain through internal financing to solve the difficulties of SMEs, or the high credit supplier chose for retailers guarantee to inventory financing to banks. In recent years, by the global financial crisis and the impact of weak economic growth in China, the development of China's supply chain finance face challenge. Tthe economy has shows the characteristics of cyclical. When economic prosperity, funding shortages can lead to lose opportunities to sale. When economic depression, financing is harder because of the time increased in product sales and Cash flow. Supply chain finance brings opportunities to the development of the enterprise, while the risk of the business can not be ignored. so So researching on the financing decision of capital-constrained supply chain on considering the influence of the economic cycle is necessary and is of great importance.The paper studies the impact of the economic cycle on financing demand, financing supply and interest rates. Then consider a single vendor and a single capital constraints retailers which consisting of supply chain. Then construct decision model based on economic cycle impact. Study supply chain financing decision through the internal financing and the external financing. Solve the optimal order of retailers and Calculate financing rate. Then Analyzing the economic prosperity index and retailer's own funds how to impact decision variables through empirical testing.The conclusions founding that the impact of the business cycle on the supply chain is two-way. When economic prosperity, supply chain benefits are increased. When economic depression, Supply chain benefits are reduced. There is a negative correlation between the financing rate and the economic prosperity index. And the less funds retailers owned the more changes get of the economic climate index. Vendor financing rates are easy to affect because of the economic prosperity index change.