| Article ID: | iaor19992533 |
| Country: | Germany |
| Volume: | 47 |
| Issue: | 1 |
| Start Page Number: | 99 |
| End Page Number: | 115 |
| Publication Date: | Jan 1998 |
| Journal: | Mathematical Methods of Operations Research (Heidelberg) |
| Authors: | Waldmann K.-H. |
The paper extends the Bierman–Hausman credit granting model by incorporating economic factors, which may vary randomly over time. Sufficient conditions are found for the optimality of simple credit policies. The monotonicity results are based on nonstandard orderings induced by the probability of collection. Moreover, monotonicity of the credit policy with respect to the prior information is studied.