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The value of integrated logistics and finance services of third party logistics firms

The value of integrated logistics and finance services of third party logistics firms The Integrated Logistics and Finance Service (ILFS), an innovative service developed by the alliance of Third Party Logistics (3PL) firm and financial institutions, offers finance and logistics solutions to optimise the availability of capital within a given budget-constrained supply chain. Comparing 3PL firm's Conventional Logistics Service (CLS), we inspect the value of ILFS for the budget-constrained supply chain. We show that under CLS the budget-constrained retailer could not apply for commercial loans successfully because of the asymmetric information between borrowers and lenders, while under ILFS the truth is opposite. We also show that a monopolistic finance market or competitive finance market under ILFS can create value for the budget-constrained supply chain. Furthermore, the competitive finance market under ILFS could decouple the operations and finance decisions of the budget-constrained retailer. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Services Operations and Informatics Inderscience Publishers

The value of integrated logistics and finance services of third party logistics firms

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1741-539X
eISSN
1741-5403
DOI
10.1504/IJSOI.2009.029183
Publisher site
See Article on Publisher Site

Abstract

The Integrated Logistics and Finance Service (ILFS), an innovative service developed by the alliance of Third Party Logistics (3PL) firm and financial institutions, offers finance and logistics solutions to optimise the availability of capital within a given budget-constrained supply chain. Comparing 3PL firm's Conventional Logistics Service (CLS), we inspect the value of ILFS for the budget-constrained supply chain. We show that under CLS the budget-constrained retailer could not apply for commercial loans successfully because of the asymmetric information between borrowers and lenders, while under ILFS the truth is opposite. We also show that a monopolistic finance market or competitive finance market under ILFS can create value for the budget-constrained supply chain. Furthermore, the competitive finance market under ILFS could decouple the operations and finance decisions of the budget-constrained retailer.

Journal

International Journal of Services Operations and InformaticsInderscience Publishers

Published: Jan 1, 2009

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