Study on the Advance Payment Rate of Advance-Payment Collection Business Based on Logistics Financial

Weiguo Cao,Yong Zhang

doi:10.4236/ce.2012.37b010

Abstract

This paper takes the advance-payment collection business based on the logistics financial as the research object, on the assumption that the logistics enterprises pay the price with their own money,and the shipper repurchases the goods unconditionally when the delivery breaks rule. From the point of logistics enterprises to quantitative analyze its key indicators of risk management and control - advance payment rate, expectations for providing a scientific basis of decision making for the business risk of logistics enterprises in China, in order to solve the outstanding contradictions between a lot of money tied up in inventory and difficulties in financing of SMEs,and provide a decision support from the side of management techniques.

Highlights

There is a saying in the G20 summit held this year,saying that if you can find a key to increase employment, go out of the poverty and financial crisis of the world, this golden key must be the healthy development of SMEs, so we can see the SMEs’ great importance to global economic development
Some large logistics companies have started to provide logistics financial services, for example, Since 1999 the China Logistics jointly with the banks developed the first inventory pledge financing business, to the present, it has been cooperated with the Industrial and Commercial Bank, Construction Bank, Agricultural Bank, Merchants Bank and more than a dozen financial institutions, To carry out the inventory pledge financing business, release credit to SMEs and solve the financing problem
Advance-payment collection business as a business model of logistics financial services provided by logistics companies, there are few literature devoted to the study both domestic and foreign

Summary

Introduction

There is a saying in the G20 summit held this year,saying that if you can find a key to increase employment, go out of the poverty and financial crisis of the world , this golden key must be the healthy development of SMEs, so we can see the SMEs’ great importance to global economic development. Drawing on the successful experience of UPS, logistics companies develop the advance-payment collection business can solve the financing problems of SMEs effectively. Advance-payment collection business as a business model of logistics financial services provided by logistics companies, there are few literature devoted to the study both domestic and foreign. UPS utilizes the funds for loans through its own financial institutions, and the borrowers are still limited to UPS’ customers or delivery business This business model accelerate the customer's working capital turnover, improve the client's financial situation,and save the inventory holding costs and cost of operating logistics services network for customers. Make E(T ) ≧0, E(S) ≧0,we get the range of w (1 + Q)V0 + (kC0 − S0 ) + Q(C0 − C) ≤ w

Probability of default by shipper

Numerical Analysis

Conclusion