Financing newsvendor inventory

Authors:
Maqbool Dada;Qiaohai Hu
Affiliations:
Purdue Krannert School of Management, West Lafayette, IN 47907, United States;Purdue Krannert School of Management, West Lafayette, IN 47907, United States
Venue:
Operations Research Letters
Year:
2008

Citing 7
Cited 7

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Abstract

If the cost of borrowing is not too high, the capital-constrained newsvendor borrows funds to procure an amount that is less than would be ideal. The lender charges an interest rate that decreases in the newsvendor's equity. Furthermore, we derived a non-linear loan schedule that coordinates the channel.