Universität zu Köln

Protopappa-Sieke, Margarita and Seifert, Ralf W. (2017). Benefits of working capital sharing in supply chains. J. Oper. Res. Soc., 68 (5). S. 521 - 533. BASINGSTOKE: PALGRAVE MACMILLAN LTD. ISSN 1476-9360

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Abstract

Supply chain finance and working capital management are important avenues to reduce supply chain costs. Small suppliers may not have sufficient working capital to finance their operations and efficiently supply their customers. We develop a model that captures the fundamental aspects of financial and operational planning in a two-stage supply chain, with both strong and weak members. A strong member can negotiate for more favorable financing rates, more advantageous payment terms, and shorter lead times than a weaker member. We investigate two working capital allocation scenarios. In the dedicated working capital allocation scenario, the members of the supply chain each have their own working capital. In the joint working capital allocation scenario, the members of the supply chain have a joint pool of working capital. Our results demonstrate significant benefits when the members of the supply chain share the working capital. We also show that extending payment delays to a supplier upstream results in higher overall supply chain costs.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Protopappa-Sieke, Margarita UNSPECIFIED UNSPECIFIED UNSPECIFIED Seifert, Ralf W. UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-233378
DOI:	10.1057/s41274-016-0009-2
Journal or Publication Title:	J. Oper. Res. Soc.
Volume:	68
Number:	5
Page Range:	S. 521 - 533
Date:	2017
Publisher:	PALGRAVE MACMILLAN LTD
Place of Publication:	BASINGSTOKE
ISSN:	1476-9360
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language INVENTORY MODEL; TRADE CREDIT; PERMISSIBLE DELAY; MANAGEMENT; CONTRACTS; CAPACITY; PAYMENTS; ADOPTION Multiple languages Management; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/23337