The University of Southampton
University of Southampton Institutional Repository

Loans, ordering and shortage costs in start-ups: a dynamic stochastic decision approach

Loans, ordering and shortage costs in start-ups: a dynamic stochastic decision approach
Loans, ordering and shortage costs in start-ups: a dynamic stochastic decision approach
Start-up companies are a vital ingredient in the success of a globalised networked world economy. We believe that such companies are interested in maximising the chance of surviving in the long term. We present a Markov decision model to analyse survival probabilities of start-up manufacturing companies. Our model examines the implications of their operating decisions, in particular how their inventory strategy is influenced by purchasing, shortage, transportation and ordering costs, as well as loans to the firm. It is shown that although the start-up company should be more conservative in its component purchasing strategy than if it were a well-established company it should not be too conservative. Nor is its strategy monotone in the amount of capital available.
inventory control, dynamic programming, risk analysis, manufacturing
0160-5682
539-548
Possani, E.
9cf8adff-8feb-4b53-9143-7cc0d7b5c29a
Thomas, L.C.
a3ce3068-328b-4bce-889f-965b0b9d2362
Archibald, T.W.
5b85bd2f-e4de-4a93-8d7a-9cc5f5ac4e48
Possani, E.
9cf8adff-8feb-4b53-9143-7cc0d7b5c29a
Thomas, L.C.
a3ce3068-328b-4bce-889f-965b0b9d2362
Archibald, T.W.
5b85bd2f-e4de-4a93-8d7a-9cc5f5ac4e48

Possani, E., Thomas, L.C. and Archibald, T.W. (2003) Loans, ordering and shortage costs in start-ups: a dynamic stochastic decision approach. Journal of the Operational Research Society, 54 (5), 539-548. (doi:10.1057/palgrave.jors.2601547).

Record type: Article

Abstract

Start-up companies are a vital ingredient in the success of a globalised networked world economy. We believe that such companies are interested in maximising the chance of surviving in the long term. We present a Markov decision model to analyse survival probabilities of start-up manufacturing companies. Our model examines the implications of their operating decisions, in particular how their inventory strategy is influenced by purchasing, shortage, transportation and ordering costs, as well as loans to the firm. It is shown that although the start-up company should be more conservative in its component purchasing strategy than if it were a well-established company it should not be too conservative. Nor is its strategy monotone in the amount of capital available.

This record has no associated files available for download.

More information

Published date: 2003
Keywords: inventory control, dynamic programming, risk analysis, manufacturing

Identifiers

Local EPrints ID: 35754
URI: http://eprints.soton.ac.uk/id/eprint/35754
ISSN: 0160-5682
PURE UUID: 1f09ccee-2345-4e89-bc5a-05a6d0e4ed33

Catalogue record

Date deposited: 22 May 2006
Last modified: 15 Mar 2024 07:54

Export record

Altmetrics

Contributors

Author: E. Possani
Author: L.C. Thomas
Author: T.W. Archibald

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×