Analysis and Prevention of Credit Risk in Supply Chain

The cooperation of organizations in supply chain is based on a good credit system. With more and more credit contracts being signed between enterprises, the credit risk has become a main default risk for the suppliers. As a kind of potential threat, the credit risk will influence the normal operation of supply chain. It´s no doubt that the occurrence of credit risk will lead to a deviation from the prospective earnings, and make the members of supply chain less competitive. So it´s necessary to analyze the causes which result in credit risk in supply chain and find out appropriate and specific ways to solve these problems. This paper defines the concept of credit risk in supply chain, and then analyzes the influencing factors in credit trade by game theory. Lastly the corresponding precautions are put forward to minimize the credit risk and strengthen the credit consciousness of each member in supply chain.