Supplier Failure Research Articles

Integrating machine learning and deep learning for enhanced supplier risk prediction

The importance of anticipating and preventing disruptions is underscored by the increased operational complexity and vulnerability caused by advancements in supply chain management (SCM). This has spurred interest in integrating machine learning (ML) and deep learning (DL) into supply chain risk management (SCRM). In this paper, we introduce a tailored method using ML and DL to improve SCRM by predicting supplier failures, thus boosting efficiency and resilience in SC operations. Our method involves five phases focused on classifying and predicting supplier failures in non-conforming deliveries. This involves forecasting failure quantities and estimating total disruption costs. Initially, data from an automotive company is selected, and appropriate potential features and algorithms are selected, performance metric aligns with case study objectives, facilitating method evaluation are used such as: Precision, recall, F1-score, and accuracy metrics assess classification models, while Mean Squared Error (MSE) is used for regression tasks. Finally, an experimental design optimizes models, assessing success rates of various algorithms and their parameters within the chosen feature space. Experimental results underscore the success of our methodology in model development. In the classification task, the Random Forest (RF) classifier achieved 86% accuracy. When combined with the Gradient Boosting classifier, the ensemble exhibited enhanced accuracy, highlighting the complementary strengths of both algorithms and their synergistic impact, surpassing the performance of RF, Support Vector Regression (SVR), k-Nearest Neighbors (KNN), and Artificial Neural Network (ANN). Noteworthy is the performance in regression tasks, where Linear Regression, ANN, and RF Regressor displayed exceptionally low MSE compared to other models.

Financial Institution's Role in Supply Chain Risk Management: Strengthening Resilience and Mitigating Financial Risks

One of the most important problems that multinational organizations are dealing with in risk-oriented supply chains is efficiency assessment and choosing the best low-risk financial institution for financial assistance. We provide an integrated approach for evaluating the unpredictable, dangerous, and fragile arrangement of the financial sector, which directly affects the supply chain network's processing stages. This model is supported by fuzzy-soft tools. The real economy is currently under pressure from both the domestic economic crisis and the decline in international commerce. President Xi Jinping has often suggested stepping up initiatives to assist the real economy's high-quality growth. In this regard, the development of the model for supply chain financing offers a fresh approach to resolving the funding issues faced by businesses. To tackle the financial issues facing the marketplace, we should use the chain of custody finance model, but we also need to thoroughly understand the risks associated with it and how to manage them. False trade orders and insufficient control over core businesses are difficulties that the present logistics finance risk management must deal with. The World Wide Web, big data, and block chain technologies are all blooming, opening new avenues for risk management in block chain finance. As a result, the goal of this essay is to examine the features of supply chain finance based on the technology of block chain, examine the risks associated with financing supply chains, and debate how to use block chain innovation for supply chain banking risk management.[4] Risk Financing: To assist organizations in transferring or reducing supply chain risks, financial institutions offer risk financing solutions including insurance & alternative risk transfer methods. The creation of novel risk financing products, evaluation of their performance, and comprehension of the effects on the resilience of supply chains can all be the subject of research. Financial institutions provide supply chain financing options like factoring, discounted invoices, and supply link finance programmed that help businesses manage their working capital, improve cash flow, and lower the risk of supplier failure to pay or insolvency. The effects of different financing choices on supplier relationships, supply chain stability, and overall risk reduction may be studied. Financial institutions collaborate with businesses to detect and classify different supply chain risks. An extensive investigation of the supply network environment, encompassing suppliers, transportation, logistics, and market dynamics, is required in this phase. Data gathering techniques used may include questionnaires, interviews, & site visits. In the above rank one is axis, and the last one is Punjab national bank. Financial Institution in Supply Chain Risk Management In the above rank one is axis, and the last one is Punjab national bank.

Determination of Insurance Premiums to Mitigate the Risk of Company Losses Due to Supplier Failure Using Black-Scholes-Merton Model

The Micro and Small Enterprises (MSMEs) sector in Indonesia has made a significant contribution to the Indonesian economy. However, MSMEs in Indonesia face various challenges that may occur in the future, for example, supplier failure. Therefore, it is essential to determine the right form of risk mitigation to reduce the impact of supplier failure for MSMEs, and one such approach is to have insurance. This study aims to calculate the premium price using the Black-Scholes-Merton model approach. The data used is the aggregate losses experienced by MSMEs fostered partners of PT Wijaya Karya (Persero) Tbk. Data simulation was generated on lognormal distribution to determine the premium price. The application of the Black-Scholes-Merton model on the calculations showed that MSMEs have to pay a premium of IDR 4.165.061 for one year.

Supplier’s Past Performance Criteria and its Effect on Procurement Performance in County Governments in Kenya

The major focus of the study is to investigate the supplier selection criteria and its effect on procurement performance in county governments. The specific objective was to examine the effect of supplier’s past performance on procurement performance in county governments. Descriptive research design was applied in the study. The study population was 168 that included professional employees working in the county government departments of Murang’a and Kirinyaga counties. Purposive sampling was preferred in selection of the sample size of 60 respondents who were the heads of the departments. Data collection tool was self-administered questionnaires. Both descriptive and inferential statistics were used to perform data analysis. The results of the model summary indicated that R2 equals 0.642, thus revealing that 64.2% of the procurement performance in county governments can be attributed to supplier’s past performance. The study concludes that there is a positive strong effect between supplier’s past performance and procurement performance. The study recommends an effective scrutiny on supplier’s past performance before awarding contracts by carrying out due diligence to minimize uncertainties arising from supplier failure to execute complex contracts that require a given level of expertise

Ultra-low latency communication technology for Augmented Reality application in mobile periphery computing

Abstract Improved Reliability and Low Latency Communication (IRLC) with Augmented Reality (AR) has become an emerging technology in today’s world. To minimize an accessory adaptation for Customer Equipment (CE) in AR, it may be feasible to offload the AR workload onto the onboard devices. Mobile-Edge Computation (MEC) will improve the throughput of a CE. MEC has caused enormous overhead or communication omissions on wireless media, making it difficult to choose the optimal payload proposition. The proposed system explores on-board devices that work together to achieve an AR goal. Code splitting is a Bayesian network used to examine the overall interdependence of efforts. From a longevity and endurance perspective, it is used to reduce the Probability of Supplier Failure (PSF) of an MEC-enabled AR environment. Weighed Particle Swarm Optimization (WPSO) was proposed despite the reality based on the emphasis on balancing the issue. As a result, a heuristic-based WPSO facilitates to improve the performance measures. A hybrid method could significantly increase the assertion of a predicted PSF in various network scenarios compared to the existing communication technologies. A preliminary iterative approach is suitable for AR operations and IRLC scenarios to generalize the attributes.

Selection of the Technical Framework Contract to Avoid Supply Failures of Oil Country Tubular Goods

To meet the demands of Oil Country Tubular Goods (OCTG) in PTEP, the company made a Long-Term Contract – Call Off Order (LTC-COO) with several OCTG manufacturers/suppliers in Indonesia. Since 2021, there have been two significant problems related to the supply of OCTG. First, two contractors in WA 6 could not fulfil the tubing demand totaling 10,581 joints with a value of USD 2,850,839. The second is four contracts LTC-COO at PTEP could not supply for 2022 needs, worth USD 28,579,436. The problems above are closely related to the price increase of global OCTG price. The proposed price increase could not be approved. As a result, contractors are unwilling to meet supply demand at the original contract price. Long Term Contracts are not fully effective if dealing with fluctuating material prices. The contract failed to supply the needs of OCTG as expected initially. In the end, six LTC-COO contracts had to be terminated early, with an unrealizable value of USD 33,982,587. The company is in critical because it does not have a contract to meet the OCTG demands. This study aims to find the best alternative to solve the OCTG supply failure problem. Several methods and analysis tools are used to simplify the study. BPMN, price, and risk analysis are used for business situation analysis. To determine the root cause using the Current Realty Tree method. Furthermore, for selecting the best alternative solutions using the Analytic Hierarchy Process (AHP). Based on the research that has been done, the best alternative solution to overcome OCTG supply failure in PTEP is using a Technical Framework Contract (TFC) as a contract model for providing OCTG. TFC has main advantages: it binds a minimum of two contractors in a technical aspect and has flexible prices following market prices. The price is formed when there is an OCTG request. With these advantages, the TFC OCTG contract will resist to supplier failure, price increases, and open other optimization opportunities in inventory management. The TFC contract is expected to be effective in overcoming OCTG supply failures.

Using Four Metaheuristic Algorithms to Reduce Supplier Disruption Risk in a Mathematical Inventory Model for Supplying Spare Parts

Due to the unexpected breakdowns that can happen in various components of a production system, failure to reach production targets and interruptions in the process of production are not surprising. Since this issue remains for manufactured products, this halting results in the loss of profitability or demand. In this study, to address a number of challenges associated with the management of crucial spare parts inventory, a mathematical model is suggested for the determination of the optimal quantity of orders, in the case of an unpredicted supplier failure. Hence, a production system that has various types of equipment with crucial components is assumed, in which the crucial components are substituted with spare parts in the event of a breakdown. This study’s inventory model was developed for crucial spare parts based on the Markov chain process model for the case of supplier disruption. Moreover, for optimum ordering policies, re-ordering points, and cost values of the system, four metaheuristic algorithms were utilized that include Grey Wolf Optimizer (GWO), Genetic Algorithm (GA), Moth–Flame Optimization (MFO) Algorithm, and Differential Evolution (DE) Algorithm. Based on the results, reliable suppliers cannot meet all of the demands; therefore, we should sometimes count on unreliable suppliers to reduce unmet demand.

S115 Access to High-Cost Biological Agents: Perceptions of Brazilian Patients With Inflammatory Bowel Diseases

Background: Brazilian patients with inflammatory bowel diseases (IBD) requiring therapy with biological agents usually have access to medicines through the National Unified Healthcare System (SUS). There is no data regarding the perception of IBD patients on the access to these agents. The aim of this study was to analyze the perception of Brazilian IBD patients regarding the access (availability and provision quality) to high-cost drugs in the healthcare public system. Methods: A questionnaire-based survey was carried out between February 2022 and March 2022 in an IBD referral center in Brazil. All adult patients with an established diagnosis of ulcerative colitis (UC) or Crohn’s disease (CD) in use of biological therapy were invited to participate. We collected data on the type of biological drug in use, occasional lack or shortage of the biological agent (number of supplier failure or shortage, average time to regularize the distribution, losses in the treatment of patients), and difficulties reported by patients in obtaining the missing drugs. Results: Overall, 205 patients met the inclusion criteria and answered the questionnaire. The majority of the patients had CD (n = 161, 78.5%); nearly half of them (n = 104, 50.7%) were female, 87 patients (42.4%) were unemployed, and of these, 40 patients (46.0%) had government assistance as the main source of income. Medications in use: infliximab (n = 128, 62.5%); adalimumab (n = 39, 19.0%); certolizumab pegol (n = 8, 3.9%); vedolizumab (n = 14, 6.8%); ustekinumab (n = 15, 7.3%); golimumab (n = 1, 0.5%). 172 patients (83.9%) reported at least one lack of delivery of the biological medicine in the last year, with a single shortage in 42 patients (24.4%), at least 2 shortages in 47 patients (27.3%) and 3 or more shortages in 78 patients (45.3%). The average time to regularize the distribution was up to one month in 44 cases (25.6%), up to 2 months in 64 cases (37.2%) and more than 3 months in 56 patients (32.6%). Among the 172 patients who reported delays in drug delivery, 101 patients (58.7%) felt that the delay may have caused some type of impairment in their treatment (for example, emergence or worsening of symptoms, loss of response, relapse, treatment failure, need to change the drug, and emergence of adverse events). Conclusion(s): Brazilian IBD patients reported high rates of failure to dispensing biological drugs by the national healthcare system within a 1-year period. Our data point to the need for improvement of this system for the correct supply of medication to avoid treatment failure and relapse, in addition to avoiding negative expectations of patients regarding treatment with biological drugs.

Consumers of Organic Products in the Circular Economy

Purpose: To identify drivers and barriers perceived by consumers of organic products regarding their actions supporting circularity. Theoretical framework: Circular Economy (CE) is seen as solution for food crisis and environmental pollution. It also contributes to growing awareness of social responsibility and sustainability, which increases the interest in organic products. Method/design/approach: Qualitatively, twelve consumers of organic products were interviewed through in-depth online interviews. Results and conclusion: Consumers identified several drivers that encourage them to be part of CE, such as less packaging at farmer’s markets, the opportunity to compost at home, and government policies that support waste sorting for recycling. However, the failure of suppliers to provide initiatives to reuse packaging, bags and to return glass containers, the restrictions on home composting, lack of room to separate and dispose of recyclable waste efficiently, not used to reusing vegetable waste, and not used to returning packaging to suppliers, were identified as barriers to CE. Research implications: This study contributes to the development of CE, promotion of sustainability and establishment of CE as an element of organic production. Originality/value: Studies address CE with focus on the industry. Contemplate the importance of the consumer for the development of circularity, this study advances with a look at the consumer, foment to the comprehensive, until then not investigated, of the perception of consumers of organic products regarding their actions supporting circularity.

Global and local supply chain sourcing design: cost and delivery reliability comparison in unimodal and intermodal transportation

The design of the sourcing strategy is key to gain a competitive advantage. In recent times, supplier failure is one of the most crucial risks of supply chains. The purpose of this study is to investigate the cost of local and global sources of the supply chain (SC) with the comparison of delivery reliability. The approach of this study applied data from one of the largest paper and board industries in Asia. We used a bi-objective mixed-integer linear programming (BOMILP) model for the formulation of the problem. Pareto optimal solutions are generated by implementing the multi-objective genetic algorithm (MOGA) to facilitate decision-makers to trade-off between cost and delivery reliability. The results reveal significant savings of 138.51 million Pkr per year by contracting with local suppliers (Pakistan) as compared to global suppliers from Turkey, China and Vietnam. However, the delivery reliability of global suppliers is higher than local suppliers. Further, this study can be developed by investigating the performance, wastage, and quality of the supplies provided by local and global suppliers.

Risk prioritization based on the combination of FMEA and dual hesitant fuzzy sets method

Paper aims This paper proposes the combination of the quality tool FMEA (Failure Modes Effects and Analysis) with the DHFS (Dual Hesitant Fuzzy sets) technique to process judgements with hesitation and hence conduct the prioritization of failure modes considering a group decision making problem. Originality There are no studies that combine the FMEA tool with the DHFS technique. Research method Firstly, this paper presents a review of the current FMEA literature. Then, the group decision model is presented combining the FMEA and the DHFS. Finally, an illustrative example in the context of supplier failure modes is brought to guide future applications of the proposal. Main findings The paper presents a model that combines the FMEA tool with the DHFS. It allows considering different risk factors weights in a group decision process with experts from several areas. The model is also able to deal with the different types of hesitations present in the judgements. Implications for theory and practice The traditional FMEA does not deal with individual judgments of different decision makers. The new proposal can be easily applied in different contexts of potential failure modes analysis considering different types of hesitation in group decision making, such as medical and humanitarian.

Enhanced sourcing strategy for centralized multitier multiple suppliers network with failure risks

PurposeThis paper attempts to address three key objectives. The primary aim is to enhance sourcing strategy for a centralized and coordinated multitier multiple suppliers networks with uncertain demand and supplier failure risks. The second objective is to enumerate all possible practical supplier(s) failure scenarios and quantify expected loss of demand cost. Finally, the work illustrates statistical experimentation to identify “influential” variables that can significantly impact the expected supply network and loss costs.Design/methodology/approachA seven-step solution framework is proposed to derive an optimal sourcing strategy for the specific network configuration with varied supplier failure scenarios. Five distinct models are formulated to address all possible scenarios of supplier failure events. Mixed-integer nonlinear programming technique is used to derive expected supply network cost and loss cost. The solution framework is verified using a real-life case.FindingsA cross-case analysis indicates that an increase in suppliers' failure risk (SFR) probabilities or customer demand rate increases the expected loss of demand costs for a multitier supply network. Besides, an increase in unit component prices increases the expected supply network cost.Research limitations/implicationsA two-tier automotive supply network for a single product is considered for all case studies.Practical implicationsThe enhanced strategy can facilitate practitioners enumerate different supply network failure scenarios and implement the best solution.Originality/valueThere is no evidence of earlier research to derive optimal sourcing strategy for a centralized, coordinated multitier multiple supplier's network, considering demand uncertainties and SFR.

Effects of certified‐organic production on supplier failures and potential income effects of supplier failures on producers: Evidence from vegetable and macadamia producers in Kenya

AbstractOrganic agriculture uses contracts and networks to overcome its asset‐specificity problems and to ensure compliance with its standards and norms, including environmental conservation. This study analyzed the effects of certified‐organic production on supplier failures and the potential income effects of these failures on vegetable and macadamia producers in Kenya. Using survey data and propensity score matching, the study found that organic macadamia production reduces delivery failures because its asset specificity necessitates a dedicated transport system. It also found that organic vegetable production reduces quality failures because organic consumers are often less concerned about the physical quality of organic produce. However, despite these advantages, cases of supplier failures are still rampant among both organic and nonorganic producers of macadamia and vegetables. The potential income effects of these supplier failures, especially quantity and delivery failures in macadamia, raise concerns. These problems necessitate policy interventions, especially with respect to establishing and strengthening producer organizations, which are often very instrumental in overcoming quality, quantity, and delivery failures.

Preventing supplier non-conformance: extending the agency theory perspective

PurposeThe supply chain management literature and agency theory suggest that preventing supplier non-conformance—a supplier's failure to conform to the requirements of the buyer—requires monitoring supplier behavior. However, case studies collected to explore how buyers monitored suppliers revealed an unexpected empirical phenomenon. Some buyers believed they could prevent non-conformance by either trusting their suppliers or relying on a third party, without monitoring their behavior. The purpose of this article is to examine conditions when buyers should monitor supplier behavior to prevent non-conformance.Design/methodology/approachThis article employs a mixed-method design by formulating an agent-based simulation grounded in the case-study findings and agency theory to reconcile observed unexpected behaviors with scholarly suggestions.FindingsThe simulation results indicate that buyers facing severe consequences from non-conformance should opt to monitor supplier behavior. Sourcing from trusted suppliers should only be reserved for buyers that lack competence and have a small number of carefully selected suppliers. Moreover, buyers facing minor consequences from non-conformance should generally favor sourcing from trusted suppliers over monitoring their behavior. The results also suggest that having a third-party involved in monitoring suppliers is an effective path to preventing non-conformance.Originality/valueBy combining a simulation with qualitative case studies, this article examines whether buyers were making appropriate decisions, thereby offering contributions to theory and practice that would not have been possible using either methodological approach alone.

Simulation based online production planning

In the production of complex products, staying on schedule is a daily challenge. Unscheduled disturbances within the production and its processes (e.g. supplier failures or machine malfunction) can occur. A quick and correct reaction from the people in charge is required to avoid negative consequences such as delay in delivery. Nowadays production often lacks a high degree of transparency, due to old machinery and unavailable or missing digital information within production. Therefore today’s reactions and decision-making processes, often based on discussion and personal experience, are time consuming and can involve countless human resources. With Industry 4.0 there are more possibilities to create a high degree of transparency in production because lots of information is digitally and contemporarily available. Machines can communicate with a manufacturing execution system to provide production data in near real-time. This leads to new possibilities such as a simulation based online production planning system. The paper deals with the development of such a system to provide intelligent assistance for decision making and for reaching the corporate objectives.

Real-Life Experience With Pirfenidone in Idiopathic Pulmonary Fibrosis in Argentina. A Retrospective Multicenter Study

IntroductionPirfenidone was the first antifibrotic drug approved in Argentina for idiopathic pulmonary fibrosis (IPF). Outcomes in real life may differ from the results of clinical trials. The primary endpoint was to study the tolerance of pirfenidone in real life. Secondary endpoints were to analyze effectiveness and reasons for discontinuation. Materials and methodsRetrospective observational study conducted in four specialized centers in Argentina. We analyzed the medical records of patients with IPF who received pirfenidone between June 2013 and September 2016. Adverse events (AE) and the variables that could influence these results were analyzed. Forced vital capacity (FVC%) parameters were also compared between the pre-pirfenidone and post-pirfenidone periods. ResultsFifty patients were included, 38 (76%) men, with mean age (SD) 67.8 (8.36) years. Mean (SD) exposure to pirfenidone was 645.68 (428.19) days, with a mean daily dose (SD) of 2064.56mg (301.49). Nineteen AEs in 15 patients (30%) were reported: nausea (14%), asthenia (10%) and skin rash (8%). A total of 18 patients (36%) interrupted treatment, only 1 definitively. The most frequent reason for discontinuation was failure of suppliers to provide the drug (9 subjects; 18%). We compared the evolution of FVC% between the pre-pirfenidone and post-pirfenidone periods, and found a mean (SD) FVC% decline of 4.03% (7.63) pre-pirfenidone and 2.64% (7.1) post-pirfenidone (P=.534). ConclusionsIn our study, pirfenidone was well tolerated and associated with a reduction in FVC decline, although without reaching statistical significance.

Decision modeling of risks in pharmaceutical supply chains

PurposeManaging risks is becoming a highly focused activity in the health service sector. In particular, due to the complex nature of processes in the pharmaceutical industry, several risks have been associated to its supply chains. The purpose of this paper is to identify and analyze the risks occurring in the supply chains of the pharmaceutical industry and propose a decision model, based on the Analytical Hierarchy Process (AHP) method, for evaluating risks in pharmaceutical supply chains (PSCs).Design/methodology/approachThe proposed model was developed based on the Delphi method and AHP techniques. The Delphi method helped to select the relevant risks associated to PSCs. A total of 16 sub risks within four main risks were identified through an extensive review of the literature and by conducting a further investigation with experts from five pharmaceutical companies in Bangladesh. AHP contributed to the analysis of the risks and determination of their priorities.FindingsThe results of the study indicated that supply-related risks such as fluctuation in imports arrival, lack of information sharing, key supplier failure and non-availability of materials should be prioritized over operational, financial and demand-related risks.Originality/valueThis work is one of the initial contributions in the literature that focused on identifying and evaluating PSC risks in the context of Bangladesh. This research work can assist practitioners and industrial managers in the pharmaceutical industry in taking proactive action to minimize its supply chain risks. To the end, the authors performed a sensitivity analysis test, which gives an understanding of the stability of ranking of risks.

Experiencia de la vida real con pirfenidona en la fibrosis pulmonar idiopática en Argentina. Estudio retrospectivo multicéntrico

IntroductionPirfenidone was the first antifibrotic drug approved in Argentina for idiopathic pulmonary fibrosis (IPF). Outcomes in real life may differ from the results of clinical trials. The primary endpoint was to study the tolerance of pirfenidone in real life. Secondary endpoints were to analyze effectiveness and reasons for discontinuation. Materials and methodsRetrospective observational study conducted in 4 specialized centers in Argentina. We analyzed the medical records of patients with IPF who received pirfenidone between June 2013 and September 2016. Adverse events (AE) and the variables that could influence these results were analyzed. Forced vital capacity (FVC%) parameters were also compared between the pre-pirfenidone and post-pirfenidone periods. ResultsFifty patients were included, 38 (76%) men, with mean age (SD) 67.8 (8.36) years. Mean (SD) exposure to pirfenidone was 645.68 (428.19) days, with a mean daily dose (SD) of 2,064.56mg (301.49). Nineteen AEs in 15 patients (30%) were reported: nausea (14%), asthenia (10%) and skin rash (8%). A total of 18 patients (36%) interrupted treatment, only 1 definitively. The most frequent reason for discontinuation was failure of suppliers to provide the drug (9 subjects; 18%). We compared the evolution of FVC% between the pre-pirfenidone and post-pirfenidone periods, and found a mean (SD) FVC% decline of 4.03% (7.63) pre-pirfenidone and 2.64% (7.1) post-pirfenidone (P=.534). ConclusionsIn our study, pirfenidone was well tolerated and associated with a reduction in FVC decline, although without reaching statistical significance.

Mitigating Supplier Default Risk: Information and the Demand for Trade Credit

We bring to light a benefit of trade credit relationships in which large investment-grade firms borrow from their smaller suppliers despite the ability to secure less expensive financing elsewhere. The use of trade credit allows a firm, which is wary of a supply disruption, to indirectly acquire information regarding the stability of a supplier. This information allows the firm to improve its sourcing decisions and to better protect against supply chain disturbances. We also show that the demand for trade credit increases with the probability that a supplier is unstable and with the cost of supplier failure to the focal firm. These results provide theoretical justification for various empirical associations documented in the literature on trade credit. Paradoxically, we also show that a necessary condition for trade credit to arise in our setting is that a bank or other financial intermediary holds a comparative advantage in lending over the other firms in our model. This result stands in contrast the much of the theoretical literature on trade credit which justifies inter-firm lending by assuming the advantage in lending lies with a supplier.

Internal risks of factoring business: identification, cause-effect relationships, accounting and management aspects

The article identifies the risks of the economic activity of a factoring company. The identified risks are divided into internal (fraud risk, credit risk, liquidity, nonpayment, staff, supplier's failure to meet the terms of the supply / factoring contract) and external (legal, inflation, currency, interest, industry risks, country risk). The cause-effect relationships of the identified risks have been established. The content of information requests of the leading part of the factoring company, as well as the management subsystems (accounting, economic analysis, control and planning), and the direction of information flows between them (to manage the company's internal risks) is determined. These proposals contribute to the improvement of accounting and analytical support for risk management of the factoring business, the choice of alternative risk management methods, the impact on their possible consequences, minimizing the negative impact of risks on the financial condition of the company, and establishing the effectiveness of factoring operations under risk.