Supplier-Led Supply Chain Finance.pdfVIP

Research Journal of Applied Sciences, Engineering and Technology 4(18): 3375-3380, 2012 ISSN: 2040-7467 ? Maxwell Scientific Organization, 2012 Submitted: March 26, 2012 Accepted: May 16, 2012 Published: September 15, 2012 Corresponding Author: Yang Wang, School of Business Administration, South China University of Technology Guangzhou, 510640, P.R. China 3375 Study on Supplier-Led Supply Chain Finance Yang Wang, Yunlu Ma and Yuhe Zhan School of Business Administration, South China University of Technology Guangzhou, 510640, P.R. China Abstract: This study analyzes a class of supply chain financing system that includes the small and medium- sized manufacturer, the retailer and the raw material supplier which is the core enterprise. Both the manufacturer and the retailer face cash-constraint and cannot produce/order their optimal quantity. Our study is mainly to discuss two financing methods: direct financing and supply chain finance financing, to analyze the two methods of supply chain profit distribution status and then to derive the model of mechanism about the distribution of profits. According to the profit function, it indicates that choosing the supply chain finance financing is more beneficial for the supply chain. Keywords: Cash-constraint, finance, optimal configuration, supply chain INTRODUCTION Trade-credit, including supply chain finance financing, has been the largest source of working capital for a majority of business-to-business firms in the United States and has been a critical source of capital for many businesses, especially for startup and growing businesses (Srinivasa Raghavan and Vinit, 2011). China supply chain financial started later, until the 1990s, it emerge some scattered single node financing business. With impact of globalization, in recent years, China supply chain financing activities has been gradually catching up the pace of the world, such as the Eternal Asia (a supply chain enterprise) make its profit continue rapidly incr