The article is devoted to the study of the effectiveness of factoring management as an innovative product based on the formation of the optimization factoring portfolio of trade enterprises, which ...will serve as a basis for management decisions on the implementation of this service in business.
As a result of the research a number of conclusions and methodical recommendations of practical direction are formulated. The formation of the optimization factoring portfolio is based on the principles of the CAPM portfolio investment model proposed by W. Sharp. The conditions for the formation of portfolio investments, which are reflected in the price model of the capital market, were adapted to the formation of the factoring portfolio. The key conditions of the factoring agreement are: limits on credit risk and a given level of income, that is the company must choose a portfolio with the maximum profitability, which is achieved by minimizing the cost of this service; seek to increase the funding limit for debtors; to remove from the portfolio of debtors of the enterprise with a high risk of non-repayment of debt.
We propose to determine the debtors of the enterprise that will form the optimization factoring portfolio through the variables x1 – xn. When x = 1, the debtor is added to the factoring portfolio, and if x = 0, then it is necessary to exclude the debtor from the portfolio. In the language of factoring regression agreements, you can use a continuous linear programming problem in which the variable x will be in the range from 0 to 1, that is funding limits for debtors can be broken.
The target function of the factoring portfolio of commercial enterprises is proposed both for «invoice-discounting» (only receivables financing) and for «full factoring», that is full-fledged factoring (the use of additional related factoring services).
The profitability of the enterprise from factoring operations depends on the number of debtors in the factoring portfolio. The greater the number of debtors in the portfolio, the higher the profitability of the company from factoring. However, the company needs to consider debtors with high credit risk in order to minimize the non-repayment of receivables. Therefore, debtors with the highest credit risk of factoring should be excluded from the factoring portfolio.
To assess the economic efficiency of factoring management of trade enterprises on the basis of the formed optimization factoring portfolios, we propose to use the Cronbach & Gleser method.
The proposed proposals for the management of factoring of commercial enterprises, which is based on the formation of factoring portfolios, will regulate debt relations between enterprises with the involvement of third parties, that is, to prevent the occurrence of negative phenomena in the debt relations between commercial enterprises in the future, as well as will help maximize profits in the studied business entities.
Further research will focus on adapting the factoring portfolio of commercial enterprises to changes in the value of financial resources under the influence of transformational changes in the economy.
Keywords: factoring portfolio, trading enterprises, transformational changes, factoring management, debt relations between enterprises, profit maximization.
JEL Classification С44, С65, С61, F65
Formulas: 11; fig.: 0; tabl.: 0; bibl.: 20.
Risk, which is inherent to any business activity, is an issue that should be considered as early as at its conceptual stage and the very idea of its creation. The awareness of its existence and ...effective risk management is one of the factors which decide whether an organization will prosper or not. Control over possible risks can be exercised in several ways, one of which is outsourcing of risk to other market participants, such as financial institutions. This option is not a widespread solution in the Polish market, which may be due to low awareness among managers in the field of both risk identification and diversification. In the era of entrepreneurial economy, SMEs, which account for 99.8% of the European population and generate about 50% of GDP, having a significant impact on international trade, should become the primary addressees of training and education initiatives to inform them about risks and possibilities of their mitigation. The purpose of the article is to indicate financial services, mainly factoring, offered by money market institutions as an opportunity to improve current financial liquidity of enterprises, and to demonstrate the importance of education in adequate understanding and promotion of those solutions.
This paper introduces the core enterprise into the traditional accounts receivable financing model, which only includes the bank and the small and medium-sized enterprise (SME), and further analyses ...the strategic decisions of the bank, the SME, and the core enterprise by applying game theory. The stability of strategic decisions is also analysed. Finally, we prove the usability of the pledged financing mode of accounts receivable based on supply chain finance through simulation analysis and evolutionary game theory. Research results show that adding the core enterprise to the traditional accounts receivable financing model can reduce the bank's loan risk to a certain extent, enhance the credibility of the accounts receivable, which will be beneficial to the realisation of accounts receivable financing. The successful operation of accounts receivable financing mode will help the three parties to achieve three-win results. In addition, the lending rate of the bank and the reputation loss suffered by the core enterprise due to default will affect the evolutionary equilibrium of the tripartite evolutionary game.
Supply chain finance is an important way of realising the transformation of the asset-heavy operation mode in car-sharing services to an asset-light operation mode, by transforming the ownership cost ...into a variable cost. This study considers a service supply chain with vertical shareholding comprising a vehicle manufacturer and a car-sharing operator; further, it establishes financing decision-making models under financial leasing (FL) and instalment factoring finance (IFF) and explores the impact of profitability and shareholding ratios on FL and IFF. The results how that service profitability has a fundamental influence on financing decisions. The pooling effect and service satisfaction rate affect ownership costs and rental income, respectively. In turn, these factors jointly affect the choice of financing strategy. Moreover, there is a threshold of financing strategy choice related to the shareholding ratio: a large shareholding ratio means IFF is optimal, while when the ratio is low, FL is optimal. Finally, under certain conditions, a composite contract with revenue sharing and linear transfer payment for the optimal financing strategies can be adopted to improve supply chain performance. This study thus provides effective strategies for realising asset-light operation in car sharing by transforming ownership cost into variable cost.
Invoice financing has been a steadily growing component of the financing market as a whole for the last few years, and, in 2016, it became the third largest financing market. Nonetheless, the risk of ...frauds is still very high, and most solutions proposed so far are based on private, proprietary platforms that cannot match the global nature of such a market. Even the most recent proposals based on blockchain are mainly adopting a private, permissioned blockchain due to the lack of confidentiality in public blockchain. In this article, we propose an Invoice financing platform based on a public blockchain supporting both fully open and group-restricted auctioning of invoices. We addressed the confidentiality issue by storing the confidential data encrypted in IPFS and the corresponding hash in the smart contract hosted on Ethereum blockchain. Our blockchain-based solution ensures data confidentiality and benefits from the main properties of the public blockchain required in Invoice financing systems, such as transparency, immutability, trustworthiness, and security. Furthermore, our platform introduces a reputation system based on the past behavior of entities, computed using the blockchain global ledger. Such a reputation system allows insurance companies to modulate the cost of the insurance contracts they offer. This combination guarantees the complete transparency and tamperproofness of a public blockchain, while it allows reducing insurance costs and fraud possibilities.
RSA Prime Factorization on IBM Qiskit Rengkung, Matthew Evans Audric; Wicaksana, Arya
Journal of internet services and information security,
05/2023, Volume:
13, Issue:
2
Journal Article
The advancement of quantum computing in recent years poses severe threats to the RSA public-key cryptosystem. The RSA cryptosystem fundamentally relies its security on the computational hardness of ...number theory problems: prime factorization (integer factoring). Shor’s quantum factoring algorithm could theoretically answer the computational problem in polynomial time. This paper contributes to the experiment and demonstration of Shor’s quantum factoring algorithm for RSA prime factorization using IBM Qiskit. The performance of the quantum program is evaluated based on user time and the success probability. The results show that a more significant public modulus N in the RSA public key improves factorization’s computational hardness, requiring more quantum bits to solve. A further enhancement on implementing Shor’s oracle function is essential in increasing success probability and reducing the number of shots required.
•This paper explores and demonstrates the innovation potential of blockchain and smart contracts for supply chain finance.•Through the Agents Events Data (AED) process mapping method, this study ...identified examples of how financial risks can be mitigated or reduced with blockchain and smart contracts.•The study demonstrates the utility of the AED process mapping as a holistic framework with granular levels for future empirical and fieldwork and opens up new avenues for research.
This paper explores and demonstrates the innovation potential of blockchain and smart contracts for supply chain finance (SCF) based on cross-border beef supply chains from Australia to China. Our study adopts mechanism design and design-driven activities, and specifically employs the Agents Events Data (AED) process mapping method, which is a hybrid approach that combines Business Process Redesign (BPR) and the Resources Events Assets (REA) accounting model. The AED method consists of three sequential stages: (1) map supply chain's present state or condition; (2) introduce blockchain and smart contracts to improve supply chain processes and “traditional” SCF models; and (3) evaluate the technology and innovation impact and create new models for SCF innovation. This study identified examples of how financial risks can be mitigated or reduced with blockchain and smart contracts; and, where the credit financing itself could be fundamentally transformed. Based on this analysis, the paper's contribution is twofold: First, it proposes the group buying business model as a basis of whole-of-supply-chain finance promising new areas for SCF models that can reduce financial cost and improve cash flow performance due to greater buyer-led financing certainty and the direct involvement of buy-side demand for supply-side improvements. Second, the study demonstrates the utility of the AED process mapping as a holistic framework with fine granular levels for future empirical and fieldwork and opens up new avenues for research.
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A statistical procedure is assumed to produce comparable results across programs. Using the case of an exploratory factor analysis procedure—principal axis factoring (PAF) and promax rotation—we show ...that this assumption is not always justified. Procedures with equal names are sometimes implemented differently across programs: a jingle fallacy. Focusing on two popular statistical analysis programs, we indeed discovered a jingle jungle for the above procedure: Both PAF and promax rotation are implemented differently in the
psych
R package and in SPSS. Based on analyses with 247 real and 216,000 simulated data sets implementing 108 different data structures, we show that these differences in implementations can result in fairly different factor solutions for a variety of different data structures. Differences in the solutions for real data sets ranged from negligible to very large, with 42% displaying at least one different indicator-to-factor correspondence. A simulation study revealed systematic differences in accuracies between different implementations, and large variation between data structures, with small numbers of indicators per factor, high factor intercorrelations, and weak factors resulting in the lowest accuracies. Moreover, although there was no single combination of settings that was superior for all data structures, we identified implementations of PAF and promax that maximize performance on average. We recommend researchers to use these implementations as best way through the jungle, discuss model averaging as a potential alternative, and highlight the importance of adhering to best practices of scale construction.
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