Dynamic programming has been used to solve numerous complex problems in business and engineering. This study applies dynamic programming to a retail decision-making problem related to trade credit. A price, shelf-space, and time-dependent demand function is introduced to model the finite time horizon inventory. Trade credit was considered in the model because suppliers commonly provide retailer...

The last years have seen the development of many credit scoring models for assessing the creditworthiness of loan applicants. Traditional credit scoring methodology has involved the use of statistical and mathematical programming techniques such as discriminant analysis, linear and logistic regression, linear and quadratic programming, or decision trees. However, the importance of credit grant ...

In recent years, credit risk has played a key role in risk management issues. Practitioners, academics and regulators have been fully involved in the process of developing, studying and analysing credit risk models in order to find the elements which characterize a sound risk management system. In this paper we present an integrated model, based on a reduced pricing approach, for market and cre...

Farm households in developing countries are generally credit constrained. This forces them to simultaneously take production and consumption decisions. In this paper, a two-period lifecycle model of the farm household is constructed and the household’s investment response to changes in land and agricultural output prices are derived theoretically. It is shown that in the absence of credit marke...

We study the sensitivity of banks’ credit supply to small and medium size enterprises (SMEs) in the UK to banks’ financial condition before and during the financial crisis. Employing unique data on the geographical location of all bank branches in the UK, we connect firms’ access to bank credit to the financial condition (i.e., bank health and the use of core deposits) of all bank branches in t...

We study the sensitivity of banks’ credit supply to small and medium size enterprises (SMEs) in the UK to banks’ financial condition before and during the financial crisis. Employing unique data on the geographical location of all bank branches in the UK, we connect firms’ access to bank credit to the financial condition (i.e., bank health and the use of core deposits) of all bank branches in t...

Section 2227 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Board of Governors of the Federal Reserve System to conduct a study and submit a report every five years to Congress detailing the extent of small business lending by all creditors. The act specifies that the study should identify factors that provide policymakers with insight into the small business...

0377-2217/$ see front matter 2011 Elsevier B.V. A doi:10.1016/j.ejor.2011.01.023 ⇑ Corresponding author. Tel.: +44 0 7796035843. E-mail addresses: [email protected] (M.M.C. So) Thomas). This paper derives a Markov decision process model for the profitability of credit cards, which allows lenders to find an optimal dynamic credit limit policy. The states of the system are based on the borrower’s ...

We study the reaction of commercial banks to external macroeconomic shocks using panel data from over 120 banks in Argentina for the period 1996-1999. We show that all banks reduce lending when systemic risk increases and that this reaction is driven by credit supply decisions by banks, beyond and above the impact of reduced credit demand or increased regulatory pressure. However, the underlyin...