In today’s competitivemarkets, most firms in United Kingdom and United States offer their products on trade credit to stimulate sales and reduce inventory. Trade credit is calculated based on time value of money on the purchase cost (i.e., discounted cash flow analysis). Recently, many researchers use discounted cash flow analysis only on the purchase cost but not on the revenue (which is signi...

Article history: Received June 10, 2013 Received in revised format 25 August 2013 Accepted September 2 2013 Available online September 8 2013 This paper studies the issue of channel coordination for a decentralized supply chain consisting of one vendor and one buyer in multi-period setting. Considering the allowance of the backorder at the buyer side distinguishes this work in the literature. T...

In this paper, a model is developed to determine retailer's inventory policy under two-level trade credit system. It is assumed that the retailer has a powerful position so that he can obtain the full trade credit offered by supplier whereas customer can obtain just the partial trade credit from the retailer. The proposed model also allows fully backlogged shortages. This robust Mathematical mo...

This study explores a credit derivative pricing model with counterparty risk and the contagion effect. To compare with the standard credit derivative pricing model, we analyze the counterparty risk and the contagion effect to a kthto-default Basket Credit Linked Note (BCLN) valuation by Monte Carlo simulation. Counterparty risk and the contagion effect show significant influence for kth-to-defa...

It has been shown that input-output linkages along supply chains affect firms' performance such as sales, productivity, and innovative capacity. This paper explores a new aspect in the literature, examining how supply chain relations influence financial transactions between firms. More specifically, this paper, using an exhaustive dataset on buyer-supplier networks in Japan, studies whether sup...

Financial credit risk assessment has gained a great deal of attention. Many different parties have an interest in credit risk assessment. Banking authorities are interested because it helps them to determine the overall strength of the banking system and its ability to handle adverse conditions. Due to the importance of credit risk analysis, many methods were widely applied to credit risk measu...

Term structures of default probabilities are omnipresent in credit risk modeling: time-dynamic credit portfolio models, default times, and multi-year pricing models, they all need the time evolution of default probabilities as a basic model input. Although people tend to believe that from an economic point of view the Markov property as underlying model assumption is kind of questionable it see...

We study how supply risk, fixed supplier costs, financial constraints, and the dual role played by the suppliers as the providers of parts and the financiers of the manufacturer affect the relationship among firms in a supply chain, supplier selection, and supply chain performance. Using a one-period model, we consider joint procurement and financing decisions of a firm with limited financial c...

Though it is an important means for enterprises to increase market demand and boost profits, trade credit can carry risks. Besides, risks also result from uncertain demand. Decision-makers’ attitude towards risk will influence the decisions of enterprises, so meaningful study impact preference on supply chain performance. This paper explores effect risk-averse preferences manufacturer or retail...