An APF-Based Order Quantity Decision-Making Model Under Enterprise Default Risk

Abstract

Advance payment financing (APF) is one of the main financing models insupply chain finance. Considering the random fluctuation of marketdemand and endogenous default, this paper focus on the enterpriseoptimal order quantity decision-making under default risk based on APF.Firstly the analytic result of default probability is solved, and thenthis paper analyzes the relations of loan-to-value ratios, repurchaserate and wholesale price with default probability. Finally, this paperputs forward the optimal order quantity model of the enterprise.