A joint inventory–finance model for coordinating a capital-constrained supply chain with financing limitations

Faced with economic recession, firms struggle to find ways to stay competitive and maintain market share. Effective coordination of the supply chain can solve this problem, but this may fail if existing capital constraints and financial flows are ignored. This study addresses the challenge by exploiting coordination through joint decision-making on the physical and financial flows of a capital-constrained supply chain. We also consider the capital-constrained member’s financing limitations that lead to lost sales. Two scenarios based on non-coordinated and coordinated structures are modeled in the form of bi-objective optimization problems that simultaneously optimize system costs and service levels. The models are solved using the $$\varepsilon$$ ε -constraint method. The results indicate that the non-coordinated model cannot satisfy more than about 50% of the demand due to capital shortage and financing limitations, while the coordinated model can satisfy all of the demand via internal financing. Furthermore, the proposed coordination scheme leads to cost reduction for the members and the total system. To motivate all members to accept the proposed coordination scheme, a cost-sharing mechanism is applied to the coordination procedure. Finally, a sensitivity analysis concerning financial parameters is provided for validating the coordination model.

Short-Term Debt and Financial Performance of Small and Medium Scale Enterprises in Buganda Region, Uganda

Short-term debt is regarded as an important source of financing for Small and Medium-sized enterprises (SMEs). This is because it can be easily accessed and useful during times of emergent working capital shortage. However, short-term debt is the least researched among the components of capital structure, which explains why its contribution to the financial performance of small and medium-sized businesses still lacks empirical validation especially in the Ugandan context. This paper sought to determine the effect of short-term debt on financial performance of Small and Medium Enterprises in Uganda. The study adopted a descriptive cross-sectional research design to collect and analyse the data. Stratified random sampling technique was used to select SMEs while purposive sampling technique was used to select one key respondent from each of the sampled 453 SMEs in Uganda. Primary data was collected using survey questionnaire. Data was analysed using descriptive statistics and simple linear regression analysis. The findings indicted that short-term debt had a negative and significant effect on financial performance of SMEs as measured by return on assets. The study provides empirical evidence to support the propositions in the extant literature that short-term debt significantly hampers financial performance of SMEs. The study recommends that SMEs should adopt low cost operation procedures to improve profitability. This would lead to accumulated profits that can be used for investment purposes as a means of driving growth among the SMEs without resorting to borrowing. This paper suggests that further research should be conducted to establish the justification for the negative and significant effect of short-term debt on financial performance using qualitative approaches.

Manufacturer's channel selection in a capital-constrained supply chain under bargaining

In the context of a capital-constrained supply chain, we examine how a direct channel added by a manufacturer influences the players’ optimal decisions and profits under bargaining. The capital constrained retailer adopts a type of hybrid financing scheme including bank credit and equity financing to alleviate its capital shortage. We characterize the equilibrium results under different sales channels, and examine the impacts of the bank loans ratio and bargaining power on the players’ optimal decisions. The conditions of the equilibrium channel choices are derived. We find that if the retailer’s bank loans ratio in the retail channel is beyond a certain threshold, a dual-channel structure can enhance the profits of the manufacturer and supply chain. The retailer, however, will benefit from the direct channel when its bank loans ratio in the retail channel is below a certain threshold. We further demonstrate that a dual-channel structure can reduce the degree of double marginalization of the overall supply chain. In addition, to solve the potential channel conflict, a bilateral payment mechanism is developed to achieve Pareto improvement for both players. Numerical examples are included to illustrate the major results of the paper.

Mushroom Production Benefits, Status, Challenges and Opportunities in Bangladesh: A Review

Compacted information on mushroom cultivation in relation to production, performance, problems and prospects is very important for developing this sector. So, the aim of the review paper is to compile information on mushroom cultivation in Bangladesh. Mushroom production is increasing due to high demand of domestic market and export potentiality. In Bangladesh 40000 MT mushrooms are produced during 2018-19. Oyster, Reishi, Milky, Button, Straw and Shiitake mushrooms are most preferable species and cultivated by the farmers; but the maximum cultivation is confined to oyster mushroom (Pleurotus spp.) which are grown throughout the year. Mostly young aged educated people and rural women are adopting mushroom farming as commercial basis in Bangladesh. The study revealed that mushroom production is easy work because it requires only a little technical efficiency and a highly profitable agribusiness as evident for its lucrative benefit cost ratio (BCR 1.55-4.25). Although mushrooms production increased, there are some problems confronting by the mushroom growers during cultivation and marketing including lack of cultivation house, unavailability of good spawn, capital shortage, lack of equipment’s, lack of available market and promotion in local level, lack of storage facilities etc. which are needed to be addressed for further development of this sector. There is enormous opportunity of expanding mushroom farming throughout the country. Considering the country’s limited land, over and unemployed population, strengthening the production of mushroom could be one of the sustainable options for the development of rural economy. Development of this sector would also improve the diversified business and employment opportunities both in the rural and semi-urban areas.

MODELING AND SIMULATION FOR SUPPLY CHAIN FINANCE UNDER UNCERTAIN ENVIRONMENT

This paper studies the role of factoring in a bilateral supply chain, where both the supplier and retailer are financially constrained. Applying the stylized Stackelberg game, we analytically present that the supplier’s capital shortage limits the advantage of trade credit provided to the retailer. To overcome this limitation, we design a hybrid strategy composing of trade credit and factoring, and then investigate how the supplier uses factoring strategy to achieve the best performance. Analytical and numerical results show that: (1) each supply chain partner can benefit from factoring, and the benefits depend on operational and financial characteristics; (2) in a fairly priced factoring market, bankruptcy costs reduce the benefits of factoring, but does not change the dominance of full factoring; (3) in a strategically priced factoring market, partial factoring may dominate full factoring. Managerially, our study implies that a supplier may benefit from dividing his accounts receivable when facing a factor with a strong pricing ability.

Steam engines in agricultural use in Croatia and Slavonia during the Austro-Hungarian Monarchy

Summary Industrial revolution and modernization of agriculture in Croatia and Slavonia began in mid-19th century and evolved at a slower pace compared to the other countries of the Austrian Empire. The main reasons were lack of capital, shortage of good river- and land traffic routes, slowness in the construction of railways, slowness in the introduction of steam engines, lack of skilled workforce and extensive farming. The second agricultural crisis in Europe, which lasted from 1873 until 1895, motivated large holdings in Croatia and Slavonia to introduce steam engines and machines for the purpose of rationalization of agricultural production. Locomobiles were mostly represented on holdings with over 575.5 ha. The then country of Slavonia, as an eminently agrarian region and the main source of wheat was leader in the use of steam engines, steam ploughs and steam-powered machines in agriculture. The locomobile was used in agriculture until the mid-20th century and was discontinued with the growing use of tractors with internal combustion engine and the use of combine harvesters. Until 1918, Croatian lands were a part of the Austro-Hungarian Monarchy.

A stochastic approach for measuring the uncertainty of claims reserves

ABSTRACT This paper aims to obtain metrics for quantifying the variability of technical provisions for claims by making use of deterministic and stochastic models. In short, everything that the traditional methods do not provide (measures of variability and capital insufficiency) are of fundamental importance for efficient actuarial management. The proposed methodology reveals the probability of insufficiency of the allocated capital to cover the commitments assumed by the insurer. In order to maintain resources to cover the indemnities payable to the insured, insurance companies include technical provisions in their balance sheets. Technical provisions are estimates and are therefore a source of fluctuations in the profit and loss statement of insurers, so understanding and protecting against these adverse variations is fundamental for efficient actuarial management. The stochastic approach enables internal models to be studied for solvency capital, which is a subject that lacks studies in the Brazilian market, and which is determined by a standard model pre-defined by the regulatory body. Stochastic modeling was proposed for Incurred But Not Reported Reserve using bootstrapping and, to validate this approach, the results were compared with the traditional approaches using real Motor Hull and Motor Third Part Liability data from a Brazilian insurance company. There are advantages of adopting stochastic methods instead of deterministic ones to determine technical provisions for claims, since it is possible to empirically estimate the probability distributions. The quantiles of these curves reveal the estimated probability of the real value exceeding a particular level of provisioning in order to extract the probability of capital shortage that the traditional methods do not provide. In addition, the results show that the traditional methods are too conservative, allocating more capital than necessary.

Perception of Risk Factors and Determination of Risk Management Strategies According to Agricultural Enterprise Typologies

In this study, it was aimed to determine the risk management strategies and the level of risk perception of the entrepreneurs in agricultural enterprises classified according to production activities. Risk behaviours of entrepreneurs were examined according to the enterprise typologies, and the reference game was used for this purpose. The success of the economic activities of the enterprises was determined by an analysis of the annual operating results. The risk perception was investigated according to the enterprise typology. As a result, it was determined to be perceived as risk factors: drought, fluctuation of input and product prices in the livestock enterprises; drought, precipitation, pests, frost and hail in the mixed plant enterprises; drought, precipitation, frost and hail in the mixed plant and livestock enterprises; pest, diseases, hail, drought and precipitation in the specialized perennial enterprises; storm, capital shortage, loans, price fluctuation, yield fluctuation and fire in the specialized horticulture enterprises; drought, frost, hail, insufficient and unpredictable precipitation in the crop enterprises. The general information on agricultural issues, the implementation of new farming techniques, the diversity in production, the planned debt, the contract production, agricultural protection and the market follow were found out as management strategies for these risk factors.

Assessment of the Challenges and Opportunities of Women Entrepreneurs in Sodo Town, Wolaita Zone, SNNPR

This study was aimed to assess the challenges that hinder the performance of women engaged in service enterprises. It also aimed to find out the main opportunities that women entrepreneurs might access to attain their goal. Accordingly, it identified lack of working place, shortage of working capital, shortage of training, lack of credit facility, burden of double responsibility and absence of husband support, and poor education back ground were major challenges that constrained the performance of women entrepreneurs. The various institutions providing support to women together with the current constitution were considered as opportunities for women entrepreneurs in the study area. The study utilized descriptive cross sectional statistics to analyze quantitative data and content analysis to compute qualitative data. Various points to tackle the challenges and to utilize the different opportunities available to improve the performance of women entrepreneurs were recommended.