Optimal Sourcing Model of Manufacturer under fixed amount Credit Guarantee Mechanism
Date Issued
2015
Date
2015
Author(s)
Ho, Chia-Hau
Abstract
Small and medium enterprise (SME) acts as an essential cornerstone in economic development in Taiwan, creating jobs and equally distributed incomes. Especially in times of economic slowdown, SME shows stabilizing the economy and to prevent the deterioration of the businesses, but SME in operation often face some challenges, and the biggest problem is the funding issue, Sometimes SME can’t provide sufficient credit or collateral, so the bank tends to avoid default risks by not lending money to SME, and sometimes even lead to bankruptcy, so that the entire supply chain cannot run. To deal with this problem, a model named“Firefly Counterpart Guarantee”, which is founded by Small and Median Enterprise Credit Guarantee Fund, is introduced in this research. This model works under credit guarantee mechanism: the manufacturer helps its supplier (SME) to have a loan from the bank by offering a pledge capital in the bank account. When the supplier default, bank will be able to use the money, in other words, when the manufacturer is willing to share the default risk with banks, it will have more confidence in loaning. Therefore, the manufacturer is a starter of the credit guarantee mechanism; it should fulfill the retailer’s demand as much as possible. Also, the manufacturer intends to build up supply chain sourcing model to maximize its profitability. The optimal decision under profit maximization is obtained. After sensitivity analysis on important factors is performed, the conclusions and suggestions are made. We believe our model can provide a good solution to industry operations for all parties in the supply chain if credit guarantee mechanism can be applied.
Subjects
Credit Guarantee Mechanism
Pledge loan
Small and Medium Enterprise
Supply Chain
Type
thesis