The impact of payment term extensions on the working capital management of an automotive supply chain
研究了付款延迟对供应商营运资金的影响，通过多周期模型分析延长付款期限如何影响供应链的协同现金到现金周期和股东价值，为管理者缓解付款延迟的负面效应提供参考。
Substantial evidence has shown that payment delays generate negative effects on suppliers’ working capital level and thus can further affect the entire supply chain’s working capital efficiency and even result in bankruptcy for capital-constrained suppliers. The adoption of emerging solutions such as supply chain finance (SCF) is considered an innovative approach to deal with this issue. However, the current literature seldom considers the impact of payment term extensions on the supply chain’s working capital management (WCM) through the development of applicable SCF methods. Thus, motivated by how SCF can improve a supply chain’s WCM in the presence of payment delay, we establish a multi-cycle model and identify the conditions under which extended payments will impact on the supply chain’s collaborative cash to cash (CC2C) cycle and the shareholder-value added (SVA). Finally, the numerical analysis not only confirms the major findings of this paper but also provides some additional insights that can assist practitioners in mitigating the adverse effects caused by payment delays.