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.
- Capital-constrained coordination
- Stochastic inventory
ASJC Scopus subject areas
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics