Dynamic Inventory Management with Inventory‐based Financing
| Autor: | Jiye Xue, Vernon Ning Hsu, Xiting Gong, Ke Fu |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Finance
Inventory control 021103 operations research business.industry 05 social sciences Working capital 0211 other engineering and technologies Economic shortage 02 engineering and technology Management Science and Operations Research Industrial and Manufacturing Engineering Inventory management Loan Order (exchange) Management of Technology and Innovation Capital (economics) 0502 economics and business Value (economics) Business 050203 business & management |
| Zdroj: | Production and Operations Management. 30:1313-1330 |
| ISSN: | 1937-5956 1059-1478 |
| DOI: | 10.1111/poms.13323 |
| Popis: | This study considers a stochastic inventory management problem where a capital‐constrained firm can obtain additional working capital through inventory‐based financing (IBF) by pledging its inventory to obtain loans from a lender. We show that the firm's optimal inventory policy in each period may order new inventory up to a state‐dependent order‐up‐to level subject to the firm's capital and IBF loan constraints, or salvage existing inventory down to a state‐dependent salvage‐down‐to level. We further partially characterize the structures of the two state‐dependent levels in each period. Through analytical and numerical studies, we offer a number of new insights regarding the optimal inventory management for a capital‐constrained firm with access to inventory‐based financing. In particular, we find that when the firm anticipates a shortage of capital with which to meet high demands in a future period, it may strategically over‐stock its inventory in earlier periods in order to secure the necessary capital. Through extensive numerical studies, our study also demonstrates how some of the key parameters may affect the optimal inventory policy and the value of IBF. |
| Databáze: | OpenAIRE |
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