search query: @author Emery, G. W. / total: 6
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| Author: | Emery, G. W. |
| Title: | An optimal financial response to variable demand. |
| Journal: | Journal of Financial and Quantitative Analysis
1987 : JUN, VOL. 22:2, p. 209-225 |
| Index terms: | CREDIT INVENTORIES |
| Language: | eng |
| Abstract: | We develop a positive theory of trade credit based on its use as a financial response to deterministic variations in demand. The operating alternatives to trade credit, including the use of storage or spare capacity, are modelled relying on peak-load pricing literature. The article demonstrates that the extension of credit partitions the buyer' inventory cost and permits specialization. This latter is economical when the seller has an advantage at incurring the operating cost of accommodating variable demand. |
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