Credit Investigation Policy and Management Planning

Abstract

The selection of the optimal credit investigation policy is a sequential decision problem that Mehta solved using decision tree analysis. This paper explores the managerial implications of the credit investigation/credit granting policy. The credit policy selected effects the resources required for credit investigation, the scale of collection efforts, the level and breakdown of accounts receivable, cash budgets, and total sales and production costs.

Citation

Johnson, A.D. and Stowe, J.D. (1984), "Credit Investigation Policy and Management Planning", Managerial Finance, Vol. 10 No. 2, pp. 12-20. https://doi.org/10.1108/eb013537