Precautionary replenishment in financially-constrained inventory systems subject to credit rollover risk and supply disruption

Sokolinskiy, Oleg; Melamed, Benjamin; Sopranzetti, Ben J.

doi:10.1007/s10479-018-2965-1

Cited by 8 publications

(9 citation statements)

References 40 publications

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“…It is also evident that endogenous financial risk may transform to exogenous risk following a risk propagation effect (Garvey, Carnovale, and Yeniyurt 2015;Ojha et al 2018). Past literature is primarily dominated by research on corporate finance (Mousavi and Ouenniche 2018; Salas-Molina, Pla-Santamaria, and Rodriguez-Aguilar 2018) and seldom linked with core supply chain issues (Zhou and Wang 2013;Sokolinskiy, Melamed, and Sopranzetti 2018).…”

Section: Financial Risk Modelling In Supply Chainsmentioning

confidence: 99%

“…Tsai (2017) developed a simulation-driven, analytical model to examine the basic relationship between cost structure and cash flow risk in the supply chain process. Similarly, Sokolinskiy, Melamed, and Sopranzetti (2018) developed a multi-objective optimisation model to minimise disruption when considering the effect of credit rollover risk.…”

Section: Financial Risk Modelling In Supply Chainsmentioning

confidence: 99%

“…This study provides several theoretical and managerial insights based on a two-stage empirical analysis. Lack of understanding concerning the complex behaviour of financial risk and their impact on supply chain stakeholders is apparent in the literature (Sokolinskiy, Melamed, and Sopranzetti 2018). In particular, modelling of a set of financial risk in order to understand the relational perspective, is a unique research contribution.…”

Section: Contribution To Research and Practicementioning

confidence: 99%

“…The growing trend in global financial instability has placed financial risk at the centre stage. However, despite its prominence, research on financial risk within supply chain risk management literature is limited (Wandfluh, Hofmann, and Schoensleben 2016;Osadchiy, Gaur, and Seshadri 2016;Sokolinskiy, Melamed, and Sopranzetti 2018). Especially, the impact and propagation of financial risk in supply chains are found to be missing (Lian 2017;Oliveira, Kadapakkam, and Beyhaghi 2017;Dolgui, Ivanov, and Sokolov 2018;Scheibe and Blackhurst 2018).…”

Section: Introductionmentioning

confidence: 99%

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Impact of financial risk on supply chains: a manufacturer-supplier relational perspective

Ghadge

Jena

Kamble

et al. 2020

International Journal of Production Research

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This study aims to analyse the manufacturer-supplier relational perspective under the influence of exogenous financial risk. Following corporate finance theory, a multi-objective decision model for supplier selection and order allocation is developed to maximise the total profit of the manufacturer, and minimise the implicit equity stake and financial risk faced by selected suppliers. A two-echelon supply chain is explored under the influence of foreign exchange risk, default risk, market risk and price fluctuation risk, and solved using an NSGA-III algorithm. Three case scenarios are analysed to explore the influence of a set of financial risk on the manufacturer-supplier relationship and the behaviour of suppliers concerning risk profile, both in the short and long-term horizon. The results are analysed from both the manufacturer as well as supplier perspective, and the optimal conditions are discussed under the cascading risk circumstances. The study provides multiple insights into the impact of financial risk on supply chain relationship and will be valuable for dealing with similar uncertain economic environment. The research is likely to be of benefit beyond supply chain managers, like investors and financial risk managers in making informed decisions. The need to focus on systemic risk in supply chains is evident from the study.

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Section: Financial Risk Modelling In Supply Chainsmentioning

confidence: 99%

Section: Financial Risk Modelling In Supply Chainsmentioning

confidence: 99%

Section: Contribution To Research and Practicementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Impact of financial risk on supply chains: a manufacturer-supplier relational perspective

Ghadge

Jena

Kamble

et al. 2020

International Journal of Production Research

View full text Add to dashboard Cite

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“…Supply chain-oriented SCF, meanwhile, regards SCF as a way to optimize working capital and improve the financial performance more generally. It focuses on the cooperation among supply chain participants rather than on financial products (Pfohl and Gomm 2009;Randall and Farris 2009;Ma et al 2020;Sokolinskiy et al 2018). However, any single SCF scheme has limitations in terms of participants' diversity and relational complexity in business supply chains.…”

Section: Supply Chain Finance and Dynamic Discounting Programmentioning

confidence: 99%

Dynamic discounting program of supply chain finance based on a financial information matching platform

2022

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The dynamic discounting (DD) program based on the financial information matching platform (FIMP) is an emerging but underexplored supply chain finance (SCF) model. This study explores the configuration and operation of the DD program, compares and analyzes the DD decision between the traditional model and the FIMP-based DD model, and reveals how the latter model improves the cash flow of participants. Compared with the traditional model, the FIMP-based DD model can improve the accuracy of the daily discount rate for small and medium-sized enterprises; it offers enterprises more capital sources and helps participants determine an optimal payment period. There are three major contributions of this study. First, it explores the mechanism of the platform in promoting the DD model. The DD program is not participated in by a single buyer and supplier, but by one buyer with multiple (N ) suppliers based on an FIMP. Once the fundamental decision parameters can be met, several suppliers can enjoy early payment from a specific buyer, thereby improving liquidity of the benefitting participants. Second, the study offers important managerial insights. Suppliers can calculate the discount rate to motivate buyers' early payment choices. Besides, early payments could be constituted from a mixed portfolio with buyer's own capital and that from financial institutions. Third, the study explores key parameters. The discount rate is not only related to the cost of working capital but also to the financing costs. Based on the varying relationships between discount rate and capital costs, the present study makes a reasonable argument for the use of mixed funds and then calculates the optimal early payment period. Finally, this study conducts a sensitivity analysis with numerical examples, which finds that, by adopting the FIMP-based DD program, both buyers and suppliers enjoy a fairer procurement environment and more profitable multi-lateral relationships.

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Model analysis of smart supply chain finance of platform-based enterprises under government supervision

2023

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The COVID-19 pandemic has made it more difficult and expensive for medium-sized enterprises (SMEs) to finance. In this context, relying on the network platform, smart supply chain finance effectively solves financing problems for small and SMEs. However, in the development of smart supply chain finance, there are still some problems such as unstable willingness of SMEs to participate in financing, difficulty in determining the optimal development mode of platform-based core enterprises and lack of appropriate regulatory measures. Based on whether the network platform can use its own capitals for lending, this study introduces two smart supply chain financial models (the dominant and cooperation models of platform-based core enterprises) to solve the above problems. In this study, we construct two evolutionary game models: the tripartite model, including government, platform-based core enterprises, and SMEs, and the quadrilateral model, including government, financial institutions, platform-based core enterprises, and SMEs. This study presents the evolution and stability strategies of each participant under different modes. In addition, we discuss the willingness of platforms to choose different modes and corresponding government supervision measures. This study offers several important conclusions. (1) Core enterprises that do not have the conditions to build a highly intelligent platform choose the cooperation model; otherwise, they will preferentially choose the dominant mode. (2) Under the dominant mode, the stable development of smart supply chain finance must rely on strict government supervision. (3) By adjusting the scope of tax rates and subsidies, the government can control the trend of mutual transformation of the two modes, so that the dominant mode and the cooperative mode can develop in a balanced way in the market.

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Precautionary replenishment in financially-constrained inventory systems subject to credit rollover risk and supply disruption

Cited by 8 publications

References 40 publications

Impact of financial risk on supply chains: a manufacturer-supplier relational perspective

Impact of financial risk on supply chains: a manufacturer-supplier relational perspective

Dynamic discounting program of supply chain finance based on a financial information matching platform

Model analysis of smart supply chain finance of platform-based enterprises under government supervision

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