Mixed-integer linear programming for enterprise's inventory pledge financing decision

Abstract

Small and medium-sized enterprises (SMEs) are the backbone of most countries' economy. However, they often face financing difficulties and high financing costs. In recent years, supply chain finance develops rapidly and provides a good way for SMEs to alleviate their financing problems. Inventory pledge financing is one of the most widely used supply chain financing modes. This paper studies an assets optimization problem for the companies that adopt inventory pledge financing, which involves collaterals selection, purchasing and selling decisions for multiple periods during the entire pledge horizon. For the problem, we construct a mixed-integer linear programming model and verify its effectiveness by CPLEX with a practice-based case and randomly generated instances.