Supply Chain Finance

1.5 units

This course focuses on understanding ways to better integrate operational and financial decisions within a supply chain. Our studied firms and world-class practices better integrate physical and financial flows by endogenizing not only the operational choices of the firm and its agents but also their financial decisions. Students will better understand how to make informed decisions using all relevant analytics tools at the interface of operations, finance and risk management. There are three main topics the course will explore: Supply Chain Financing: Understand how capital constraints of firms in a supply chain affect their operational choices, and what are better ways to finance working capital needs of a firm in a supply chain, when fully accounting for the operational and risk management implications of such solutions. The financing solutions that will be explored are divided into supplier led (e.g., trade credit) and buyer led (e.g., reverse factoring). Supply Chain Contracting in the presence of Financial Frictions: Study the effect of financial frictions (e.g. limited working capital, transaction costs, taxes, bankruptcy costs) on contracts and the implementation of operational strategies. The contracting issues to be explored within a supply chain finance setting are incentive coordination among firms in the chain, information asymmetries, and moral hazard issues. Integrated Operational and Financial Risk Hedging: Understand how operational and financial risks in global supply chains interact (e.g, exchange rates, commodity procurement risks, etc.), and what combination of operational and financial tools can be used to effectively manage those risks.