International Journal of Production Research volume 57, issue 4, P1161-1175 2018 DOI: 10.1080/00207543.2018.1502484 View full text
Stanko Dimitrov, Oben Ceryan

Abstract: This paper presents an inventory management policy for a retailer offering a layaway program. Layaway is a service provided by retailers that allows budget constrained consumers who have sufficiently high valuations to pay for a product in several installments rather than at once and obtain the product that has been reserved for them at the end of the payment period. If a consumer defaults on payments, then the reserved item is released back into store inventory. In this paper, we first determine the retailer'…

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