Strategy Study of Supply Chain with Confirmed Warehouse Based on Banks with Downside Risk Constraint

• 1、College of Management and Economics, Tianjin University，Tianjin 30072
• 2、School of Management and Economics, Tianjin University of Technology and Education, Tianjin 300222

Abstract：The research background of this thesis is Confirming Warehouse Financing mode which is one of the regular modes of supply chain finance. The participators includes Bank, Manufacturer (Core Company), Retailer (SME). Through analyzing the actual process of classic Confirming Warehouse Financing (CWF) mode, we obtained that the main risk point of bank comes from the core company's buy-back default. This paper analyses the retailer's order quantity and loan limit issues under a hypothesis of banks with downside risk constraint. The study shows that it is dependent between order limitation and risk attitude of bank. By using mathematic model and numerical simulation, we found: with the degree of risk aversion of bank decreasing, the influence of bank's order limitation is also weakening, eventually keeps a steady state in supply chain. The paper also analyze how the ratio of market demand to retailer's total order quantity influence the performance of supply chain, and the result shows that the ratio will has a quite great influence on whole supply chain when it between a small interval.

Keywords： Management Engineering Confirming Warehouse Financing Banks with Downside Risk Constraint Order Quantity Limit Buy-Back Defaul