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臺大管理論叢
第
28
卷第
1
期
The relationship between the fill rate for a supplier and lost sales for a manufacturer
is negative. As the fill rate for a supplier rises to a threshold, the supplier is able to pay the
loans back to the financial institution. The manufacturer does not concern with the
assessment rate anymore because financial status for the supplier is strong enough to pay
its loans back to the financial institution. In this situation, the manufacturer is completely
willing to assist the supplier within its supply chain to finance funds to achieve a
sustainable supply chain.
The relationship between the interest rate for a supplier and the assessment rate for a
manufacturer is negative. In order to maximize the profit, the manufacturer and the
financial institution negotiate the interest as high as possible. In the manufacturer’s
perspective, lower assessment rate increases his/her expected profit. Furthermore, in the
financial institution’s perspective, it rather determines regulatory upper interest rate to
earn maximized interest when the operation of supplier is not failure. On the other hand,
the assessment rate for a manufacturer is important in credit guarantee mechanism. As the
assessment rate for a manufacturer goes to zero, the financial institution no longer lends
money to the supplier; as a result, the supply chain contains only the supplier, the
manufacturer and the retailer. The supplier receives an order according the available
working capital for the supplier. The manufacturer places the order quantities as more as
possible to increase its profit though the penalty from the supplier. Consequently, the
supplier does not receive an order and thus the supply chain breaks down without credit
guarantee mechanism.
As the ratio of the penalty cost of the supplier to the penalty cost of the manufacturer
increases, the profit of the manufacturer and the supply chain increase. The supplier with
no bargaining power may improve its operation process to increase its profit.
The supplier and the manufacturer make their own decision in terms of their profit.
This study provides a matrix of decision making for the supplier and the manufacturer
under the consideration of a supplier’s failure rate and fill rate. Depending on the
supplier’s profit, the supplier considers whether it recieves an order or not. Even if the
supplier receives an order, the supplier needs to deliberately decide the production
quantities before operation. Given the supplier’s operation information, the manufacturer
determines the order quantities. In sum, six equilibriums are shown in the supply chain
under credit guarantee mechanism.