Financing Supply Chain Research Articles

Selection of third-party logistics in supply chain finance under probabilistic complex hesitant fuzzy sets and distance measures

Financial institutions attach great importance to the multiple attribute decision-making (MADM) problems of selecting an effective third-party logistics (3PL) service provider in supply chain finance. A suitable 3PL service provider can not only assist financial institutions in carrying out supply chain finance activity but can also replace financial institutions in supervising the operation of a target financing supply chain, therefore minimizing financial institutions' operating risks. However, there is no sufficient study on the selection of a 3PL service provider. Hence, the objective of this paper is to establish an innovative concept of the “probabilistic complex hesitant fuzzy set” (PCHFS), which is a hybrid structure of the complex hesitant fuzzy set and the probabilistic fuzzy set to manage complex information in real-decision theory. This paper examines the periodicity of probabilistic fuzzy information and extends the range from [0,1] to the unit disc in the complex plane to provide more ability to describe the full meaning of the information in a mathematical model. Based on the internal structure of the set and to find the degree of discrimination between the pairs of PCHFSs, the generalized distance measures and modified generalized distance measures are defined. Several properties and their relationships between them are derived in detail. Also, several cases of the proposed measures are exposed, which reduces them to the existing studies. Furthermore, based on these proposed measures, a multiple-attribute decision-making (MADM) approach is established in an uncertain environment, and several numerical examples are given to examine the feasibility and validity of the explored measures. Finally, the modified and parameterized distance measures based on PCHFSs are verified by comparing them with some existing measures.

Financing Supply Chain Resilience

Financing Supply Chain Resilience

Decision-Making Techniques Based on q-Rung Orthopair Probabilistic Hesitant Fuzzy Information: Application in Supply Chain Financing

The influence of COVID-19 on individuals, businesses, and corporations is indisputable. Many markets, particularly financial markets, have been severely shaken and have suffered significant losses. Significant issues have arisen in supply chain networks, particularly in terms of financing. The COVID-19 consequences had a significant effect on supply chain financing (SCF), which is responsible for finance supply chain components and improved supply chain performance. The primary source of supply chain financing is financial providers. Among financial providers, the banking sector is referred to as the primary source of financing. Any hiccup in the banking operational systems can have a massive influence on the financing process. In this study, we attempted to comprehend the key consequences of the COVID-19 epidemic and how to mitigate COVID-19’s impact on Pakistan’s banking industry. For this, three extended hybrid approaches which consists of TOPSIS, VIKOR, and Grey are established to address the uncertainty in supply chain finance under q-rung orthopair probabilistic hesitant fuzzy environment with unknown weight information of decision-making experts as well as the criteria. The study is split into three parts. First, the novel q-rung orthopair probabilistic hesitant fuzzy (qROPHF) entropy measure is established using generalized distance measure under qROPHF information to determine the unknown weights information of the attributes. The second part consists of three decision-making techniques (TOPSIS, VIKOR, and GRA) in the form of algorithm to tackle the uncertain information under qROPHF settings. Last part consists of a real-life case study of supply chain finance in Pakistan to analyze the effects of emergency situation of COVID-19 on Pakistani banks. Therefore, to help the government, we chose the best alternative form list of consider five alternatives (investment, government support, propositions and brands, channels, and digital and markets segments) by using proposed algorithm that minimize the effect of COVID-19 on supply chain finance of Pakistani banks. The results indicate that the proposed techniques are applicable and effective to cope with ambiguous data in decision-making challenges.

Fuzzy Decision Model: Evaluating and Selecting Open Banking Business Partners

The finance supply chain has always been a different supply chain compared to product supply chain being a service supply chain. Open Banking (OB) is one of the most important milestones since the beginning of financial technology innovation and service supply chain. As these are activities provided by traditional banks, non-bank financial institutions also provide financial service with access to consumer banking, transactional and other financial data to develop financial applications and services tailored to their customers. The development of financial technology, “Open banking”, promotes financial services to begin this transformation. However, evaluating and selecting open banking business partners from multiple perspectives for banks are underexplored. Thus, the authors in this research proposed a hybrid multi-criteria decision-making model which includes a Spherical Fuzzy Analytical Hierarchy Process (SF-AHP) model and a Multi-Attributive Ideal-Real Comparative Analysis (MAIRCA) model with supports from seasoned domain experts. The contribution of this research is a proposition of a fuzzy decision model for evaluating and selecting open banking business partners. The model successfully determined a suitable open bank provider in order to assist decision makers decide objectively.

Financing Supply Chain Resilience Via Resilience Bond: A Case Study of a Supply Network in China

Financing Supply Chain Resilience Via Resilience Bond: A Case Study of a Supply Network in China

Finance sustainable supply chain: An analysis looking for B corporations and agency theory

AbstractCompanies are often seen as villains since their main purpose is to generate shareholder value. A deeper view of organizations, however, reveals that companies have a more comprehensive role than just achieving economic returns. Based on this premise, this study aims to analyze the financing of supply chains of B corporations; we employ the perspective of agency theory in the context of the “new emerging normal.” A multiple case study of companies belonging to the B corporations’ ranking in the Brazilian scenario was prepared. In‐depth interviews were conducted with key informants from the investigated companies. The results show that the cost of obtaining certification is borne by the companies’ own resources, which are motivated by pressure from the environmental demands. The main conclusion of the study is that B Corporations, driven by economic perspectives, tend to assume the role of drivers of supply chain development. The main contribution, therefore, consists of demonstrating, based on the agency theory and the finance supply chain, that the performance of an organization under the bias of sustainability creates a collaborative cycle that induces the development of its entire supply chain.

Significance of supply chain finance: Insights from Saudi Arabia

The study examines the effect of the supply chain finance (SCF) on the corporate financial performance measured in terms of Return on Assets (ROA), Tobin's Q, and Gross Operating Profit (GOP) in the material sector of Saudi Arabia. The study selects a sample of 42 companies from the material sector listed on Tadawul starting in 2008 and ending 2019. A panel regression in terms of pooled OLS, fixed and random effects, and panel GMM is estimated to report the empirical results. The results report a negative and significant effect between the financial performance variables and supply chain finance, specifically with ROA with pooled OLS and fixed and random effects models. The results of panel GMM also show a negative and significant effect between all the financial performance variables and financing supply chain. The results are useful to academicians and the managers in the materials, inventory, and sales sections, and supply chain managers to integrate finance and SCM to achieve corporate benefits.

Selection third-party logistics service providers in supply chain finance by a hesitant fuzzy linguistic combined compromise solution method

In supply chain finance, the multiple criteria decision making (MCDM) problem of selecting a suitable third-party logistics (3PL) service supplier is of great significance to financial institutions. A suitable 3PL service supplier can not only help financial institutions carry out the supply chain finance business, but also can replace financial institutions to supervise the operation of a target financing supply chain, thus reducing the operational risks of financial institutions. As a useful MCDM method, the combined compromise solution (CoCoSo) method mainly combines a compromise decision algorithm with an aggregation strategy to obtain a compromise solution. This study extends the CoCoSo method to hesitant fuzzy linguistic environment to solve the multi-expert MCDM problem of the 3PL service supplier selection. Target criteria whose values are in linguistic forms are considered in the process of normalizing the decision matrix. A new integration approach with respect to subordinate compromise scores is introduced, and the subjective and objective weights of criteria are considered simultaneously in this extended process to avoid one-sidedness of criterion weights. A case study about the 3PL service supplier selection is given, in which the sensitivity analysis and comparative analysis are provided to highlight the advantages of the proposed method.

Performance evaluation of tourism supply chain management: the case of Thailand

Purpose The purpose of this paper is to investigate and develop a framework of the performance evaluation of tourism supply chain management (SCM) for the case of Thailand. Design/methodology/approach The performance measurement of tourism SCM was based upon the eight dimensions of service performance, namely order process management (OPM), supplier relationship management (SRM), service performance management (SPM), capacity and resources management, customer relationship management, demand management (DM), information and technology management, tour finance supply chain. Data were collected from 195 samples of experts of each component of the supply chain to identify the weight pairwise and criteria on each tourism component. The study also adopted analytical hierarchy process (AHP) technique to rank the dimensions of service performance for searching the suitable performance measurement. Findings The results showed that there are both similarities and differences in each tier. Among the eight dimensions subject to this measurement, OPM, SPM and SRM are ranked as 1, 2 and 3, respectively, in tourism supply chain. Research limitations/implications One limitation should be considered. As the results of this performance measurement are drawn from sole perspectives of the tourism-business operators, these are probably different from those of the tourists. Originality/value The contribution of this study is another effective performance measurement which is expected to benefit the evaluation of tourism supply chain for Thai tourism industry.

Inventory Financing with Overconfident Supplier Based on Supply Chain Contract

Overconfidence is a universal psychological behavior. Overconfidence on demand awareness will have a significant impact on operation decisions. The supplier estimated the demand with excessive precision which influences the inventory financing decision-making deeply. We built the demand function based on the supplier’s overconfidence. Then we established the retailer, supplier, and the Bank’s profit function, respectively. Through the analysis of the bilevel Stackelberg game, we obtained the order quantity of the retailer with the capital constraint, the wholesale price of overconfident supplier, and the loan-to-value ratio of Bank, and we analyzed the influence of overconfidence on the decision variables. We have several findings as follows. First, the overconfidence makes the decisions of the retailer, supplier, and Bank deviate from the rational decisions. Second, the space of the market profit will affect the decision variables in the joint decision-making. Third, the financing supply chain (including the Bank and supply chain) should have a positive attitude towards the overconfidence of the supplier. Forth, in the joint decision-making, the supplier need determines the buyback price according to the capital demand; and in the decentralized decision-making, the supplier should try to use high buyback price strategy.

Who Should Finance the Supply Chain? Impact of Credit Ratings on Supply Chain Decisions

Problem description: We study the impact of credit ratings on operational and financial decisions of a supply chain with a supplier and a retailer interacting via an early payment discount contract. The retailer has a single opportunity to order a product from the supplier to satisfy future uncertain demand. Both the retailer and supplier are capital constrained, and the retailer can use both short-term bank loans and trade credits for his financing needs, while the supplier can use short-term bank loans and/or the retailers early payment. We analyze for all relevant operational decisions (wholesale price, trade credit rates, bank loans, and order quantity) for capital-constrained firms. Academic/practical relevance: We add a framework on who should finance inventories, and at what rates, in the presence of differential credit ratings of the supply chain parties. Methodology: Within a modified selling to the newsvendor Stackelberg game with the supplier as the leader, we derive the equilibrium trade credit rates, wholesale price, bank loans, and order quantity. Results: We show there exists a threshold such that if the supplier’s credit rating is above it, then the supplier offers trade credits with zero interest rate and the retailer uses trade credits only. Otherwise, the supplier sets a positive rate, which motivates the retailer to combine trade credits and bank loans. The supplier always benefits from working with good rating retailers. A retailer prefers to work with suppliers outside the supplier’s credit rating hole (a finite set of ratings) over suppliers with ratings within the range. Managerial implications: We provide insights on who should finance supply chain inventories and at what rates when there are differential credit rating between the supplier and retailer. We provide a plausible explanation for the practice of large and good credit rating retailers maintaining a small cash ratio and working with small suppliers in developing countries. The online appendix is available at https://doi.org/10.1287/msom.2017.0669 . This paper has been accepted for the Manufacturing & Service Operations Management Special Issue on Interface of Finance, Operations, and Risk Management.