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Cited by 351

The DOI matches its Crossref record; 8 of the 8 references it cites were found in a registry or an index.

An Optimal Financial Response to Variable Demand

Emery, Gary W.·1987·The Journal of Financial and Quantitative Analysis
DOI 10.2307/2330713
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Abstract

This paper develops a positive theory of trade credit based on its use as a financial response to deterministic variations in demand. The operating alternatives to trade credit, which include the use of storage or additional capacity, are modeled using results from the peak-load pricing literature. The paper shows that the extension of credit partitions the buyer's inventory cost and permits specialization at incurring the components of this cost. This specialization is economical when the seller has an advantage at incurring the financial cost and does not have an advantage at incurring the operating cost of accommodating variable demand. Conditions that provide these necessary and sufficient cost relationships are described. The paper also shows that a reduction in costs rather than an increase in revenues is the source of both the buyer's and seller's increase in wealth.

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Metadata

Authors
Emery, G. W.
Venue
The Journal of Financial and Quantitative Analysis
Publisher
JSTOR
Published
1987-06
Volume
22
Issue
2
Pages
209
ISSN
0022-1090 (ISSN-L)
DOI
10.2307/2330713
OpenAlex
W2029510748
Cited by
351
References
8
FWCI
4.78
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: An Optimal Financial Response to Variable Demand. https://app.cochat.ai/papers/10.2307/2330713
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Emery, G. W. (1987). An Optimal Financial Response to Variable Demand. The Journal of Financial and Quantitative Analysis. https://doi.org/10.2307/2330713

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.