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A note on dynamic programming in accounts receivable management

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Summary

The paper considers a dynamic programming formulation of the accounts receivable problem for single outstanding amounts. An optimal collection policy can be computed efficiently by invoking a “planning horizon” result that determines a time period beyond which the decision process cannot extend. The optimality of so called monotone policies is shown under rather intuitive restrictions on the collection probabilities.

Zusammenfassung

Das Problem der Kreditüberwachung wird als einfaches dynamisches Programm formuliert. Unter Ausnutzung endlicher oberer Schranken für den Planungshorizont, die einen Zeitpunkt determinieren, über den hinaus der Entscheidungsprozeß nicht ausgedehnt werden muß, können einfache Strategien für die zeitliche Koordination von Mahnaktionen hergeleitet werden. Es wird gezeigt, daß unter recht realitätsnahen Annahmen über die Rückzahlungswahrscheinlichkeiten sogenannte monotone Politiken optimal sind.

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Authors and Affiliations

  1. Department of Applied Mathematics, Twente University of Technology, NL-7500, AE Enschede, The Netherlands

    Y. M. I. Dirickx

  2. Fakultät für Wirtschaftswissenschaften, Universität Bielefeld, D-4800, Bielefeld, Germany

    K. -P. Kistner

Authors
  1. Y. M. I. Dirickx
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  2. K. -P. Kistner
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Additional information

This research was initiated during Klaus-Peter Kistner's stay at the European Institute for Advanced Studies in Management, Brussels, and completed during Yvo Dirickx's visit at Bielefeld University

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Dirickx, Y.M.I., Kistner, K.P. A note on dynamic programming in accounts receivable management. OR Spektrum 3, 221–224 (1982). https://doi.org/10.1007/BF01719790

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  • DOI: https://doi.org/10.1007/BF01719790

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