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A test of inventory models with permissible delay in payment
Stockholm University, Faculty of Social Sciences, Stockholm Business School.
Number of Authors: 3
2017 (English)In: International Journal of Production Research, ISSN 0020-7543, E-ISSN 1366-588X, Vol. 55, no 4, 1117-1128 p.Article in journal (Refereed) Published
Abstract [en]

Contrary to the long-standing view in the finance literature that firms should maximise payment delays, research in operations management suggests that long payment delays can be suboptimal. In this study, we reconcile these two views by applying a secondary data approach to established operations management theory. Based on a sample of 3383 groups of public US firms from a novel database, we find that our data are consistent with the causal relations and theoretical predictions of the operations management literature. Firm profitability is positively associated with payment delay. Payment delay, in turn, is positively associated with the capital cost difference between buyer and supplier and negatively associated with the price elasticity of demand and the deterioration rate of inventory. However, we do not observe any significant interaction effects between these factors, which raise a number of questions for future research.

Place, publisher, year, edition, pages
2017. Vol. 55, no 4, 1117-1128 p.
Keyword [en]
supply chain management, empirical study, financial management, modelling, permissible delay in payment
National Category
Other Engineering and Technologies Economics and Business
Identifiers
URN: urn:nbn:se:su:diva-142415DOI: 10.1080/00207543.2016.1224947ISI: 000394465700010OAI: oai:DiVA.org:su-142415DiVA: diva2:1092643
Available from: 2017-05-03 Created: 2017-05-03 Last updated: 2017-05-03Bibliographically approved

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Isaksson, Olov H. D.
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