Differential pricing of industrial services: the case of inventory financing

Abstract

Integrates inventory control issues with corporate financial management and commercial lending practices. The first part of the paper considers inventory management techniques used by inventory holding businesses, then explains how inventory segmentation techniques may be used by financial credit managers. Suggests ways inventory management influences the cost of working capital to businesses. Commercial loan officers can use this information to adopt a market‐based lending strategy that segments inventory and closely matches inventory loan risks and return.