Financing newsvendor inventory

Financing newsvendor inventory

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Article ID: iaor20102890
Volume: 36
Issue: 5
Start Page Number: 569
End Page Number: 573
Publication Date: Sep 2008
Journal: Operations Research Letters
Authors: ,
Keywords: newsboy problem
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.

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