Small and medium-sized textile enterprises generally experience financial difficulties, with a high default risk because of
the textile industry’s characteristics of low concentration, long ...industrial chains, and large seasonal fluctuations. Using
a two-echelon supply chain model of the textile industry comprising a core retailer and capital-constrained supplier, this
study investigates disclosed and undisclosed factoring while considering the default risk of both the supplier and retailer
under two guarantee mechanisms: no guarantee and a third-party partial credit guarantee. Utilizing a Stackelberg game
model, this study finds that both the default risk and financial institutions’ loan-to-value ratio for accounts receivable
significantly affect optimal financing decisions and financing efficiency. First, excessively pursuing higher loan-to-value
ratios lowers financing efficiency. In addition, a partial credit guarantee from a third party can effectively reduce the
financing interest rate but cannot improve financing efficiency if the supplier assumes the guarantee fee. Thus, while
introducing a guarantee mechanism to control financing risk, financial institutions should consider supply chain
participants, rather than the supplier, to assume the guarantee fees. Furthermore, both the supplier and retailer should
finance through disclosed factoring regardless of a guarantee. Our findings offer textile industry-specific financing
insights regarding the options of guarantee and factoring financing type based on the accounts receivable.
Payables finance, also known as reverse factoring or supply chain finance, is a form of trade finance offered by a bank that provides a supplier with the option to receive a buyer’s payables early ...while allowing the buyer to extend its payment due date. There has been an increasing adoption of payables finance by various industries in recent years. In “Optimal Cash Management with Payables Finance,” X. Yan, L. Chen, and X. Ding characterize the supplier’s optimal cash policy under the payables finance arrangement with a buyer and a bank. The authors show that it is the supplier’s future cash flow uncertainty, together with the supplier’s risk averseness, that drives the cash liquidity value of payables finance. Numerical results of applying the analysis to data sets obtained from a major U.S. chemical company suggest that adopting payables finance can generate considerable value for the company and its suppliers.
Payables finance, also known as reverse factoring or supply chain finance, is a form of trade finance arrangement that provides a supplier with the option to receive a buyer’s payables early while allowing the buyer to extend its payment due date. The recent adoption of the blockchain technology has the potential to make payables finance more efficient and secure. In this paper, we study the supplier’s optimal cash policy under such a “frictionless” payables finance arrangement. Our work extends the classic cash flow management literature in four fronts: (1) we introduce the salient features of payables finance into the cash flow problem; (2) we allow cash flows to be temporally correlated; (3) we adopt a general risk-aversion utility framework for the problem; and (4) we consider a more realistic integrated cash balance model, that is, all interest gains and costs are allowed to accrue together with the cash balance in a single sum. We find the optimal cash policy possesses the “non-borrow-up-to” and “non-invest-down-to” features that differ from the classic (L, U) policy known in the literature. We further quantify the value of payables finance to the supplier and determine the equilibrium payment term extension for the buyer. We show that it is the cash liquidity enabled by payables finance to hedge against cash flow uncertainty that generates value to the supplier. To tackle the computational challenge of the problem, we derive easy-to-compute heuristic policies and system bounds. Numerical studies show that heuristic policies achieve near-optimal performance. Finally, we present results from applying our model to data sets obtained from a major U.S. chemical company. Supplemental Material: The computer code and data that supports the findings of this study are available within this article’s supplemental material at https://doi.org/10.1287/opre.2022.0196 .
Finansal kiralama ve faktoring, günümüz yoğun rekabet koşullarında varlıklarının sürdürülebilirliği çabasında bulunan işletmelerin ihtiyaç duyduğu fonların karşılanmasında kullanılan alternatif ...finansman teknikleridir. Bu finansman teknikleri, işletmelerin yatırım karlılığıyla birlikte ekonomik büyümeye de sağladığı katkıdan dolayı önem arz etmektedir. Çalışmada Borsa İstanbul’da işlem gören finansal kiralama ve faktoring şirketlerinin finansal performansları VIKOR yöntemiyle araştırılmıştır. Çalışma kapsamında Borsa İstanbul finansal kiralama ve faktoring sektöründe yer alan Creditwest Faktoring, İş Finansal Kiralama, Lider Faktoring, QNB Finans Finansal Kiralama ve Vakıf Finansal Kiralama A.Ş.’nin 2016-2020 dönemi yıllık finansal kaldıraç (yabancı kaynaklar/kaynaklar), takipteki alacaklar/varlıklar, finansal kiralama/faktoring alacakları/özkaynaklar, esas faaliyet gelirleri/esas faaliyet giderleri, diğer esas faaliyet gelirleri/diğer esas faaliyet giderleri, finansman giderleri/yabancı kaynaklar, dönem net karı/özkaynaklar, dönem net karı/varlıklar oranları dikkate alınmıştır. VIKOR yöntemi sonuçlarına göre 2016-2019 dönemlerinde Lider Faktoring A.Ş., 2020 döneminde ise Creditwest Faktoring A.Ş.’nin en iyi performansa sahip olduğu belirlenmiştir. Bu sonuçlar doğrultusunda finansal kiralama ve faktoring şirketlerine yatırımda bulunmak isteyen kişi ya da kuruluşlar öncelikle Lider Faktoring, Creditwest Faktoring ve QNB Finans Finansal Kiralama A.Ş.’yi referans almaları önerilmektedir.
The authors analyze main development trends at global, European and Russian factoring market. The analysis resultshave demonstrated that the market of factoring services was developing very ...dynamically up to 2014, but its development isrestricted by certain economic conditions. The research results have shown that factoring services cover only a small fractionof accounts receivable (for example, in Russia only 1.9 % of undue receivables were covered by factoring in 2015). The authorspropose some ways to increase factoring efficiency including the consideration of specific business features of clients and factoringinstitutional structure development.
Past research suggested that cognitive and motivational variables are differentially relevant for educational success when relying on competence tests or grades as achievement indicators. This ...differential relevance has not yet been investigated by, for example, advanced statistical methods. Therefore, reparameterization and Wald-tests were applied to statistically compare the standardized path coefficients of intelligence, academic self-concept, and interest on a scholastic competence test and grades in mathematics in a sample of N = 245 high school students. Additionally, increments of each variable beyond the other variables were examined using Cholesky factoring. Results revealed that intelligence was the strongest predictor of the scholastic competence test results, whereas self-concept was the strongest predictor of grades. Intelligence explained unique variance in the competence test and grades, whereas self-concept exhibited a unique increment only for grades. The differential relevance of cognitive and motivational variables for different achievement indicators (competence tests or grades) is discussed.
•Intelligence, self-concept (SC), interest (I) predicted competence test and grades.•Advanced methods tested differences between standardized path coefficients (β).•Intelligence revealed highest β on the competence test, SC highest β on grades.•Intelligence exhibited unique increments on test and grades, SC only on grades.•I showed no substantial increment beyond intelligence and SC.
Purpose
– Faced with increasing pressure to meet short-term financing needs, companies are looking for ways to unlock potential funds from within the supply chain. Recently, reverse factoring (RF) ...has emerged as a financing solution that is initiated by the ordering parties to help their suppliers secure financing of receivables at favorable terms. The purpose of this paper is to study the impact of RF schemes on small and medium enterprises’ operational decisions and performance.
Design/methodology/approach
– The authors model a supplier’s inventory replenishment problem as a multi-stage dynamic program and derive the supplier’s optimal inventory policy for two cases: no access to external financing; access to external financing through RF or traditional factoring. A number of numerical experiments assesses the supplier’s operational performance.
Findings
– A working capital-dependent base-stock policy is optimal. The optimal policy specifies the sell-up-to-level of accounts receivable with regard to their maturity. RF considerably improves a supplier’s operational performance while providing the potential to unlock more than 10 percent of the supplier’s working capital. When RF is associated with credit-term extension and the supplier has access to alternative sources of financing, the value of RF is then lower than intuitively expected unless the interest spread is considerably large.
Originality/value
– This is the first attempt to analytically study the impact of RF in a stochastic multi-period setting.
We consider how trade credit can coordinate a two‐echelon supply chain in the presence of supplier moral hazard and costly working capital financing. While trade credit resolves moral hazard problems ...in the absence of working capital financing costs, we show that this is not necessarily true when financial frictions make financing trade credit costly. We then show that trade credit along with an appropriately designed reverse factoring program can restore supply chain efficiency.
Purpose The purpose of this study is to define and investigate the governance requirements of supply chain finance (SCF). Design/methodology/approach A qualitative analysis of 849 news articles ...published in UK newspapers (2000–2022) using the Gioia method. Findings SCF governance relies on developing capacities for reflexive scrutiny at two stages: (1) prior to entering into an SCF relationship and (2) during its operation. Based on the notion of SCF as a complex adaptive system, we theorise SCF governance requirements as a dual-layered semipermeable boundary. The semipermeability of the two layers allows for a dynamic exchange between the SCF system and its environment. The first layer is the capacity to selectively enable or control the entry and access of certain actors and practices into the SCF system. The second layer is a capacity for ongoing scrutiny of the SCF operation and its development. Further, we identify five aspects of governance to be enabled, i.e. enhancing adaptability, building confidence, improving efficiency, advancing technology and promoting transparency; and four aspects to be controlled, i.e. preventing abuse of power, curbing fraud risk, constraining operational risk and restricting risky extensions to SCF practices. Practical implications Our dynamic framework can guide supply chain (SC) members in making decisions about whether to participate, or continue to operate, in an SCF relationship. Moreover, the findings have implications for policymakers and authorities who oversee entry/access and the involvement of SCF providers, particularly, fintech firms. Originality/value The study contributes to both the SC and governance literature by providing a systematic analysis of what SCF governance has to accomplish. Our novel contribution lies in its analysis of SCF governance based on a complex adaptive system approach, which expands the existing literature where SCF is described in rather static terms. More specifically, it suggests a need for a dynamic duality of SCF governance through the semipermeable boundary that selectively enables and controls certain SCF actors and practices.
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