Payment Terms Research Articles

An integrated approach using discrete event simulation and design of experiments for working capital management in the fuel retail trade

ABSTRACT This study introduces an innovative approach to Working Capital Management (WCM) in the fuel retail sector, using Discrete Event Simulation (DES) and Design of Experiments (DOE). Efficient WCM is essential for small businesses, particularly in fuel retailing with its tight margins and intense competition. Unlike static financial tools relying on historical data, DES interacts with indicators such as Working Capital Requirement (WCR) and Liquidity Ratios, providing stochastic and accurate information. The study examined three variables (Supplier Payment Deadline, Credit Card Receipt Deadline, and Customer Payment Profile) across 16 experimental scenarios. The Payment Term to Suppliers emerged as the key factor in reducing WCR. Despite lower liquidity potential, the company balanced short-term obligations, identifying optimal WCM scenarios. The study shifts WCM analysis from static data to forecasted, real-time data, supporting dynamic business decision-making. It concludes that DES is a valuable tool for effective WCM in fuel retail, encouraging further research.

Negotiating pricing and payment terms for insurance covered mHealth apps: a qualitative content analysis and taxonomy development based on a German experience

BackgroundGermany was the first country worldwide to offer mobile digital health applications (mHealth apps, “DiGA”) on prescription with full cost coverage by statutory health insurances. Especially statutory health insurances criticize the current pricing and payment regulations in Germany due to “free and non-transparent” pricing in the first year and lack of cost use evidence. The study consists of two parts: The first part evaluates interests of digital health application providers and statutory health insurances in Germany to identify overlaps and divergences of interests. The second part includes the development of a comprehensive pricing and payment taxonomy for reimbursable mHealth apps in general.MethodsBoth parts of the study used the input from 16 expert interviews with representatives of digital health application providers and statutory health insurances in Germany. In part one the authors conducted a qualitative content analysis and in part two they followed the taxonomy development process according to Nickerson et al. (2013).ResultsA value based care model is expected to bring the greatest benefit for patients while statutory health insurances welcome the idea of usage based pricing. The final pricing and payment taxonomy consists of four design and negotiation steps (price finding, payment prerequisites, payment modalities, composition of negotiation board).ConclusionsAs healthcare resources are scarce and thus need to be optimally allocated, it is important to implement pricing and payment terms for reimbursable mHealth apps that result in the greatest benefit for patients. To the best of the authors’ knowledge, there has been no structured study yet that examines alternative pricing strategies for reimbursable mHealth apps.The developed pricing and payment taxonomy for reimbursable mHealth apps serves as planning and decision basis for developers, health policy makers and payers internationally.

Does trade credit absorb adverse shocks? Evidence on SMEs in Japan

The aim of this paper is to examine whether trade credit can help absorb adverse shocks to firms. When firms encounter exogenous adverse shocks, if relaxation of terms of credit payment to suppliers can hold back the level of firms' real activities, then they do not need to reduce their purchases from suppliers. We test this hypothesis by using data of SMEs (small- and medium-sized enterprises) from two corporate surveys taken in Japan after the Global Financial Crisis and COVID-19. We find that firms with extended payment periods are still likely to reduce their purchases from suppliers that indicates trade credit does not help to absorb adverse shocks.

Recommendation System for Determining the Best Banner Supplier Using Profile Matching and TOPSIS Methods

Background: Choosing a banner supplier is a significant challenge for digital printing companies due to the various advantages offered by each supplier, often leading to selections based on subjective aspects such as price and quality. Objective: This research aims to develop a system that determines the best banner supplier to minimize production inefficiencies and maximize profits by comparing two calculation methods, Profile Matching and TOPSIS. Methods: A quantitative study was conducted using transaction data from the last six months. The parameter criteria used in this system include price, quality, delivery, availability, and payment terms. The study compares the effectiveness of Profile Matching and TOPSIS methods in identifying the best supplier. Results: The study results show that the TOPSIS method is superior, yielding 100% accuracy, 84% recall, and a 92% F1-score, outperforming the Profile Matching method. This demonstrates that the correct method and algorithm effectively provide the best alternative recommendations. Conclusion: The results indicate that using the TOPSIS method leads to more accurate and objective decisions based on predetermined criteria. The findings suggest that further research should focus on refining these methods to enhance decision-making in supplier selection.

Customer and provider bounded rationality in on-demand service platforms

The growing literature on operations management in the context of the sharing economy typically assumes that both customers and providers are fully rational. In contrast, we consider an on-demand service platform (e.g., Didi and Uber) with boundedly rational customers and providers that sets a price charged to customers and a wage paid to providers. Both customers and providers are sensitive to the payment terms set by the platform and also to congestion in the system (given by the relative numbers of available customers and providers in the market). We capture bounded rationality using a model in which customers and providers are incapable of accurately estimating the congestion level. We examine the impact of bounded rationality on the platform profit, consumer surplus, and labor welfare. We find that both customers’ and providers’ bounded rationalities may benefit the platform. Specifically, when customers’ or providers’ bounded rationality level and service valuation are relatively large or the valuation is relatively small, more irrational customers or providers increases the platform’s profit. Moreover, we find that the platform can exploit the bounded rationality differences between customers and providers to gain profit. Counterintuitively, we also demonstrate that the high bounded rationality of customers or providers may increase consumer surplus and/or labor welfare. Finally, bounded rationality on one side (e.g., customer side) can make bounded rationality on the other side (e.g., provider side) more likely to increase the platform’s profit, consumer surplus, or labor welfare under certain conditions.

Can a Supplier’s Yield Risk Be Truthfully Communicated via Cheap Talk?

Problem definition: When a firm (buyer) outsources the production of a new product/component to a supplier subject to random yield, a major challenge is that the supplier’s yield is usually private information. In practice, yield information is often shared via nonbinding communication—for example, a supplier self-assessment report. We examine whether such communication can be truthful and credible. Methodology/results: We analyze a cheap-talk game in which, given a simple contract that specifies the prices for each unit ordered and for each effective unit delivered, the supplier first communicates its yield level, and then the buyer determines an order quantity. We prove that truthful communication can emerge in equilibrium. To do so, we first show that if knowing the supplier’s type, the buyer will either inflate or reduce the order quantity to cope with a lower yield, depending on the product’s market potential. Under asymmetric information, the supplier will truthfully communicate its type if (i) the buyer with a high market potential intends to inflate the order quantity for a lower yield, but the buyer with a low market potential prefers to do the reverse; and (ii) the supplier is uncertain about the product’s market potential, which is the buyer’s private information, and anticipates that a hard-to-make product is more likely to have a higher market potential. Managerial implications: Truthful cheap-talk communication can emerge in equilibrium when the product’s market size and yield are negatively correlated. Truthful communication always benefits the buyer and consumers and may benefit the supplier if the product has sufficient market potential and the supplier’s production cost is not too high. Moreover, the buyer can be better off paying more for the input quantity (although part of the output is defective) or paying a higher wholesale rate if the adjustment in payment terms enhances communication credibility. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2023.0089 .

MCDM-AHP and ELECTRE collaboration apps for the best vendor selection technique

Vendor selection techniques are very important to maintain supply chain services, optimal service creates strong consistency in maintaining the continuity of supply chain business processes. The aim of this research is to provide an objective and consistent understanding of the best techniques in vendor selection which are implemented openly through the collaboration of multi-criteria decision making-analytic hierarchy process (MCDM-AHP) and ELECTRE. Empirical studies show how this approach is able to provide optimal decision-making support for the vendor selection process. Eight criteria are required which have contradictory meanings in their apps. These criteria include quality of goods (QG), payment methods (PMs), payment terms (PTs), minimum transactions (MTs), discounts (DS), delivery times (DTs), inventory (IN), and service (SV). The comparison importance value of the criteria is used as a measure of weighting the criteria through two testing approaches, namely mathematical algebra matrices and expert choice apps, through accurately assessing the optimal eigenvector from the two test approaches. Decision making support was carried out by comparison using 342 preference matrices which were developed into concordance and discordance matrices, the elimination process with threshold matrices found that the ranking results of four vendors were ranked first as worthy of being a selection priority and fifteen other vendors were ranked below.

Critical Evaluation of the Contract Selection Process Used in the Construction Industry of Kuwait

The paper investigates and assesses the contract selection procedure used in Kuwait’s construction sector. The ideas and insights of engineers involved in significant Kuwaiti construction projects will be extensively considered. In the Kuwaiti building sector, various ways of choosing the contract form will be discussed. In order to gather pertinent data about the country’s primary construction projects, questionnaires will be used. This methodology ensures a first-hand account of the challenges and preferences within the industry. This data will be analyzed to determine the best ways to enhance the current system utilized for Kuwaiti building contracts for the choice of contract forms and payment terms that could benefit from the inclusion of measures to guarantee those types of task delivery systems and payment terms in the country’s future construction projects. This paper explores the typical contract types and payment mechanisms used in Kuwait, drawing on a thorough analysis of current literature, governmental regulations, and business practices. The Standard Forms of Contract, which offer fixed-priced payments, have become the most popular option. However, when used for extensive and technically challenging projects, this contract form’s simplicity presents difficulties. Additionally, the existing system encourages contract awards based on the lowest tender, which raises questions regarding appropriateness and proportionality. The study suggests an arsenal of criteria for improving the deal selection process, with an emphasis on diverse terms of payment inside the task delivery system, in order to allay these worries. It highlights the need for a more comprehensive approach for deal selection that takes project complexity, financial constraints, and long-term project interest into account. The proposed criteria additionally include adaptability to project complexity, ensuring flexibility for challenges in large projects. Financial considerations, aligning with budgetary requirements, are crucial. The emphasis is on long-term project success, and finding a balance between simplicity and adaptability in contracts is key. These comprehensive criteria aim to improve decision-making in selecting standard contract forms for construction projects, addressing challenges in large, technically demanding endeavors in Kuwait. This research contributes to the field by introducing a novel set of criteria for contract selection, tailored to the Kuwaiti construction context. The study’s originality lies in its approach to addressing the challenges posed by current practices and its focus on refining the system for future projects. Additionally, the study employs a rigorous questionnaire survey to extract firsthand insights from industry professionals, ensuring a robust and contextually relevant exploration of the contract selection landscape in Kuwait’s construction sector.

Asset-light or asset-heavy? Implications for ride-hailing platforms’ profits, consumer surplus, and driver surplus

Recently, ride-hailing platforms have started buying vehicles and leasing them to drivers with and without cars to expand supplies and serve more customers, switching from asset-light to asset-heavy companies. Unlike the asset-light model, where the platforms can only induce with-car drivers to use their vehicles to provide services, if the platforms switch to the asset-heavy model, they have an extra supply source that allows both with-car and without-car drivers to rent vehicles.This paper studies the impact of this switch on a ride-hailing platform’s profit, consumer surplus, and driver surplus. We consider a ride-hailing platform that decides whether to buy cars and sets a price charged to customers and a wage paid to drivers. Both customers and drivers are sensitive to the payment terms set by the platform and also to congestion in the system (given by the relative numbers of available customers and drivers in the market).Driven by these features, we find that under the asset-heavy model, as the car purchase cost increases, the platform should shift from inducing both with-car and without-car drivers to rent vehicles to inducing only without-car drivers. However, in the case where the car purchase cost is not too large, the platform should adopt the asset-heavy model, which allows both classes of drivers to rent vehicles, and choose the asset-light model otherwise. We further show that customers do not always benefit from the asset-heavy model because the corresponding total supply may be less than that of the asset-light model, leading to increased congestion. Additionally, we find that the with-car driver surplus of the asset-heavy model may be higher or lower than that of the asset-light model. Finally, if the cost is sufficiently small, when the number of potential without-car drivers is large or customers’ sensitivity to congestion is large, we show that the asset-heavy model can increase platform profit, consumer surplus, and total driver surplus (i.e., the sum of with-car and without-car drivers’ surpluses), resulting in a “win-win-win” outcome.

The role of economic factors in shaping and constituting the household burden of neglected tropical diseases of the skin: Qualitative findings from Ghana and Ethiopia

Tracers of health system equity, neglected tropical diseases (NTDs) disproportionately affect marginalized populations. NTDs that manifest on the skin – “skin NTDs” – are associated with scarring, disfigurement, physical disability, social exclusion, psychological distress, and economic hardship. To support development and evaluation of appropriate intervention strategies, we aimed to improve understanding of the role of economic factors in shaping and constituting the burden that skin NTDs place on households. We collected data in 2021 in two predominantly rural districts: Atwima Mponua in Ghana (where Buruli ulcer, yaws, and leprosy are endemic) and Kalu in Ethiopia (where cutaneous leishmaniasis and leprosy are endemic). We conducted interviews (n = 50) and focus group discussions (n = 14) that explored economic themes with affected individuals, caregivers, and community members and analysed the data thematically using a pre-defined framework. We found remarkable commonalities across countries and diseases. We developed a conceptual framework which illustrates skin NTDs' negative economic impact, including financial costs of care-seeking and reductions in work and schooling; categorises coping strategies by their degree of risk-pooling; and clarifies the mechanisms through which skin NTDs disproportionately affect the poorest. Despite health insurance schemes in both countries, wide-ranging, often harmful coping strategies were reported. Traditional healers were often described as more accessible, affordable and offering more flexible payment terms than formal health services, except for Ethiopia's well-established leprosy programme. Our findings are important in informing strategies to mitigate the skin NTD burden and identifying key drivers of household costs to measure in future evaluations. To reduce skin NTDs' impact on households' physical, mental, and economic wellbeing, intervention strategies should address economic constraints to prompt and effective care-seeking. While financial support and incentives for referrals and promotion of insurance enrolment may mitigate some constraints, structural interventions that decentralise care may offer more equitable and sustainable access to skin NTD care.

Le respect des delais de paiement : Ancrage a deployer pour soutenir les PME marocaines

This study aims to assess the impact of longer payment terms on the survival of Moroccan SMEs. The data collected and processed by Bank Al-Maghrib and the Observatory of payment delays in Morocco, converge towards the same unique observation, that Moroccan VSEs are the first victims of payment delays, with customer delays exceeding 8 months in 2021. This study highlights the challenges faced by these companies, and explores the legislative measures that could improve their situation. Using a methodological approach based on narrative synthesis and the analysis of quantitative data, the study highlights the positive impact of respecting payment deadlines on the growth and sustainability of Moroccan SMEs. According to a survey conducted by the World Bank, late payment is the cause of 35% of business failures in Morocco. A strong correlation is becoming evident between payment delays and business failures, with nearly 40% of failures caused by late payment. Since 2010, late payments have been the leading cause of business failure.

Influence of supplier development on supplier satisfaction: a mediating role of buyer–supplier relationship

PurposeThe study aims to understand the influence of supplier development (SD) activities on supplier satisfaction through the lens of social capital theory (SCT) and to understand the mediating role of the buyer–supplier relationship (BSR) in improving supplier satisfaction (SS).Design/methodology/approachThe research is based on survey of 110 key informants belonging to 50 medium to small supplier companies in the Indian automotive sector. We employed the PLS variance-based modelling technique for the data analysis.FindingsThe investigation resulted in a comprehensive framework for SD activities influencing SS. Further findings recognize a positive influence of SD activities such as payment terms and BSR, which are components of structural social capital on the SS. SD activities such as quality management and delivery, which are indicators of relational capital, affect SS through the mediation of BSR.Originality/valueThe study confirms the role of BSR in SS. The deliberations can help the managers of buyer and supplier firms and researchers to classify and strategize SD activities to improve performance and BSR to become preferred customers through SS.

Optimizing local electricity markets: A bi-level primal-dual approach for integrating price-based demand response and distribution locational marginal pricing

This paper addresses the conundrum of optimizing electricity consumption patterns in response to fluctuations in demand and price, a task managed by both load aggregators and the distribution system operator (DSO). The conventional approaches in the literature to integrate demand response (DR) into optimal power flow (OPF) problems typically overlook the price responsiveness of consumers or simplify power flow equations to account for price-elastic demand.In this paper, we strive to close this gap by introducing a bi-level primal-dual optimization framework that incorporates aggregators' objectives into the market-clearing process while preserving the precision of the OPF equations. At the upper level, the model seeks to minimize both the total payment and peak load. The lower level, structured as a second-order conic (SOC) problem, aims to reduce overall generation costs subject to constraints of the second-order conic (SOC) branch flow model (BFM). The two levels interact through the optimal demand response and distribution locational marginal prices (DLMPs). The principles of convex duality principles together with the strong duality constraint are leveraged to transform the market-clearing problem into a single primal-dual problem. We also circumvent the non-linearity that stems from the DR payment term by incorporating discretizing loads and the big-M method, thus converting the problem into a mixed-integer SOC (MI-SOC) formulation. The merits of the proposed MI-SOC framework are validated through case studies conducted on the IEEE 33-bus test system, showcasing its potential to enforce price-elasticity demand response in distribution system's electricity markets.

Attribution clause as a tool for addressing contractual imbalances and applicability in civil contracts

Abstract* Attribution rules act as a tool to modify the terms of a contract by accepting pre-specified terms and conditions. This methodology ensures that the contractual relationship is protected while addressing potentially complex scenarios that may arise during contract execution due to evolving circumstances. To maintain the binding force of the contract, Parties expedite dispute resolution and protect the integrity of their contracts by choosing recourse and prior agreeing to remedies, which encourages continuity in enforcement. These clauses are intended to automatically amend the terms of the contract without requiring the parties to participate in the amendment process. These items adjust the amount of funds subject to the obligation according to changes observed by external indicators associated with the obligation. This is done by comparing the price of a particular currency with the price of a different commodity. In the case of payment in gold or foreign currency, it represents an assault on the binding legal force of the national currency by competing with it as a means of payment and considering it as one of them. Terms of payment in gold and foreign currency are excluded from the attribution requirement, which replaces legal means of payment with new means of payment. It does not constitute a basis for determining the extent of fulfillment of the obligation, and we conclude that the attribution clause is a distinct legal system that deals with amending contractual terms and the contractual imbalance they cause. Amendment is permitted in the event of circumstances occurring that would upset the balance throughout the contract implementation period, and we recommend adopting the attribution clause as an automatic adjustment tool.

Effect of Procurement Planning on Organizational Performance Within the Public Sector: A Case of Ruhengeri Referral Hospital in Musanze District, Rwanda

Public entities in Rwanda spend a significant amount of money on procurement. This is the process of acquiring goods, works, or services from a vendor. The general objective of this study was to assess the effect of procurement planning on organizational performance within the public sector. Specifically, the study assessed the effect of needs assessments in procurement planning on performance of Ruhengeri referral hospital, analyze the effect of quality specification in procurement planning on performance of Ruhengeri referral hospital, examine the effect of cost estimation in procurement planning on performance of Ruhengeri referral hospital and assess the effect of terms of payment in procurement planning on performance of Ruhengeri referral hospital. Research was guided by Resource Based viewpoint theory and Transaction Cost Economics theory. Descriptive research design was adopted in this research. This study has taken 106 populations who have direct works related to procurement planning functions from Ruhengeri referral hospital and reporting health centers (42 working at Ruhengeri referral hospital main location and 64 from 12 health centers under management of Ruhengeri referral hospital). The researcher has determined that due to the small population size, a census inquiry method employed instead of sampling. This study used both primary and secondary data, and each has its specific instruments for collection including questionnaire, documentary and interview. Here the researcher tends to interpret frequency, percentages, mean, and standard deviation, as results of Statistical Package for Social Scientists (SPSS) version 20 while content analysis used to analyze qualitative data. The Model Summary provides valuable observations into the effect of independent variables Terms of payment in procurement planning, Needs identification in procurement planning, Quality specification in procurement planning, Cost estimation in procurement planning on the dependent variable, organization performance. The findings revealed the coefficient of determination (R Square), which is 0.652, demonstrates that 65.2% of the variance in organizational performance of Ruhengeri Referral Hospital explained Terms of payment in procurement planning, Needs identification in procurement planning, Quality specification in procurement planning, Cost estimation in procurement planning. The results indicate the coefficient of needs identification in procurement planning (β: 0.399, p: 0.000), it shows the significant effect of needs assessments in procurement planning on organizational performance of Ruhengeri referral hospital. The results indicate the coefficient of quality specification in procurement planning (β: 0.387, p: 0.001), it shows the significant effect of quality specification in procurement planning on organizational performance of Ruhengeri referral hospital. The results indicate the coefficient of cost estimation in procurement planning (β: 0.152, p: 0.022), it shows the significant effect of cost estimation in procurement planning on organizational performance of Ruhengeri referral hospital. The results indicate the coefficient of terms of payment in procurement planning (β: 0.237, p: 0.021), it shows the significant effect of terms of payment in procurement planning on organizational performance of Ruhengeri referral hospital. It is recommended that Ruhengeri Referral Hospital continues to strengthen its needs assessment process by involving a wider range of stakeholders.

IMPACT OF RECEIVABLES MANAGEMENT ON PROFITABILITY WITH REFERENCE TO TIFSCO PVT LTD

Effective receivables management is a cornerstone of financial health for any business. Accounts receivable represent money owed by customers for goods or services delivered, and efficiently collecting these outstanding payments directly impacts a company's profitability. This research project delves into the intricate relationship between receivables management strategies and a firm's bottom line. We aim to explore how practices like credit policies, collection procedures, and credit analysis techniques influence profitability metrics. The core of the investigation lies in understanding how efficiently companies convert credit sales into actual cash flow. A central focus will be on analyzing the impact of receivables management on key profitability ratios, such as return on assets and operating profit margin. We will explore how factors like the speed of collections, measured by days sales outstanding (DSO), affect a company's ability to generate profits. The research will also consider the potential trade-off between stricter credit policies that might reduce bad debts but also limit sales volume. By examining real-world examples from various industries, the project aims to establish a clear understanding of how sound receivables management practices contribute to a company's overall financial success. The findings of this research can provide valuable insights for businesses to optimize their credit and collection strategies, ultimately leading to improved profitability and a more sustainable financial position. During economic slumps, customers might face financial difficulties, leading to delays or defaults on payments, impacting a company's cash flow and profitability. Granting credit to customers with a high risk of default can lead to bad debts and erode profitability. Lengthy and cumbersome collection procedures can delay the inflow of cash and hinder a company's ability to reinvest in growth opportunities. Poor communication with customers regarding payment terms and overdue invoices can lead to misunderstandings and delays in collections

Online shopping behaviour in the Northern and Southern Great Plain Regions

The aim of our study is to reveal the attitude of consumers related to online shopping, the advantages and disadvantages of online purchasing, the regional characteristics of purchasing food online. The literature review was carried out by a comparative analysis of the publications of the factors influencing the purchase decision, the advantages and disadvantages of using online channels as a priority. The secondary research, in addition to the changes in global and then Hungarian online retail, the FMCG sector and customer behavior. Primary research the survey was conducted using a standardized, structured, online questionnaire with the participation of students from the University of Debrecen and the Sándor Wekerle College of Business. The socio-demographic characteristics of the respondents (623) were measured according to the defining characteristics of online shopping. The rate of online shopping by residents living in the Great Plains region is 6 percentage points lower than the national average, poor result in the online purchase of food. The advantages of online shopping, the importance of convenience and saving time is rated equally, while other factors, e.g. the assessment of home delivery was different. Diadvantages are the terms of payment and data security. The future intention to buy online is uncertain and they imagine it within limits, and the potential purchase can only be linked to durable foods. Region-specific and product-specific (food) analysis of online shopping. Attitudes towards online shopping, based on regional characteristics, justify the fact that it would be more appropriate for store chains to use a differentiated marketing strategy, which may primarily affect marketing communication and sales organization.

Enhancing Operational Efficiency and Cash Flow through Supply Chain Optimization in the Oil and Gas Sector

The oil and gas industry continues to play a vital role in meeting the world's energy needs. As renewable energy sources gain traction, there is an imperative to refine operational models, prioritizing sustainability, and cost-effectiveness. This study employs a comprehensive conceptual framework integrating critical analysis of business scenarios, product positioning, and market segmentation. The study adopts supply network optimization, encompassing demand forecasting, inventory management, transportation, production scheduling, cash flow management, and data analytics. The research evaluates three supply models: Satellite Manufacturing, Hub Manufacturing, and Contract Manufacturing. It employs scenario analysis to assess the impact of supply chain strategies on operating and cash cycles. The analysis reveals that Hub- based contract manufacturing is the most effective model. The research demonstrates that optimizing supply networks directly influences the operating and cash cycles of companies in the Oil and Gas industry. By reducing inventory levels, optimizing supplier payment terms, and streamlining production processes, organizations can achieve cost savings, improve efficiency, and enhance cash flow management. The study underscores the importance of thorough analysis and strategic decision-making in selecting supply chain models to enhance cost efficiency, operational effectiveness, and cash flow management. The study is limited to midstream and downstream services and may vary based on industry contexts. Future research could explore additional supply chain strategies across different sectors. This research contributes to the sustainable consumption and value co-creation literature by offering practical insights for businesses operating in the oil and gas industry or similar contexts. It provides a framework for optimizing supply chain models to improve cost efficiency and cash flow management, thereby enhancing overall business performance.

Invoice level forecasting with discrete survival methods for effective forecasting of account receivables in supply chain

The objective of this study is to obtain accurate and timely Account Receivables forecasts that can feed into the Cash Flow Forecasting (CFF) for a generic wholesales scenario in a supply chain company. The main components of the CFF are the Account Receivables (AR), Account Payables (AP) and Working Capital (WC). The focus of this work is on AR, in particular on how they contribute to the overall cash flow forecasting. The prediction of AR is based on the predicted payment date of each invoice, which can be obtained from the time to payment given the issue date. In this context, we propose the use of discrete survival methods for predicting the time to payment of issued invoices. To obtain more accurate predictions for time to payment, we fit a generalized linear mixed effects model with a time-varying baseline hazard function. This approach provides greater precision for subsequent account receivables predictions compared to the prediction based on simply the payment terms of each invoice, standard time series and classification models, and continuous-time survival methods. We demonstrate the approach on two financial data sets.

The reverse mortgage market in New Zealand: key drivers of loan determination

ABSTRACT This paper examines the drivers of loan principals in the reverse mortgage and equity release market in New Zealand using a hedonic price model (HPM) approach. Our analysis using reverse mortgages data between 2004–2021, sourced from one major reverse mortgage bank, provides four key findings. First, the term of payment for repaid reverse mortgages is positively associated with loan principals, implying that longer repayment terms allow applicants who were able to repay mortgages to borrow more. Second, there is partial evidence to suggest the presence of a positive linear impact of the value of the current property on its loan principal, in line with previous house price modelling studies. Third, older applicants (age 75+) borrow less than younger applicants, which may be due to their repaying ability. Fourth, we confirm a positive effect of interest rates on reverse mortgage amounts but reject the positive association between wider loan-to-value policy restrictions and equity release lending amounts. The results broadly highlight that the house price is more relevant than any individual characteristic of a property in determining loan principals, and that all drivers are relevant in the early stage of the development of the reverse mortgages market in New Zealand.