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Optimal repayment policies for multiple loans

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  • Gupta, Sushil K
  • Kunnathur, Anand S
  • Dandapani, Krishnan

Abstract

This paper extends the applications of scheduling theory to certain problems in the area of finance. Specifically, a branch and bound algorithm to identify optimal repayment policies for multiple loans (credit purchases) has been developed. Each loan qualifies for a discount if it is paid on or before a certain date and a penalty is imposed if it is paid after its due date. These two dates are different in general. It is assumed that the cash for repayment is generated at a constant rate per day and it can be invested so that it continues to earn money until used for repayment. The objective is to minimize the present value of all future cash outflows.

Suggested Citation

  • Gupta, Sushil K & Kunnathur, Anand S & Dandapani, Krishnan, 1987. "Optimal repayment policies for multiple loans," Omega, Elsevier, vol. 15(4), pages 323-330.
    • Handle: RePEc:eee:jomega:v:15:y:1987:i:4:p:323-330
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    Citations

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    Cited by:

    1. Cheng, T. C. E. & Ding, Q. & Lin, B. M. T., 2004. "A concise survey of scheduling with time-dependent processing times," European Journal of Operational Research, Elsevier, vol. 152(1), pages 1-13, January.
    2. Faranak Emtehani & Nasim Nahavandi & Farimah Mokhatab Rafiei, 2021. "A joint inventory–finance model for coordinating a capital-constrained supply chain with financing limitations," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-39, December.
    3. C-C He & C-C Wu & W-C Lee, 2009. "Branch-and-bound and weight-combination search algorithms for the total completion time problem with step-deteriorating jobs," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(12), pages 1759-1766, December.
    4. Wieslaw Kubiak & Steef van de Velde, 1998. "Scheduling deteriorating jobs to minimize makespan," Naval Research Logistics (NRL), John Wiley & Sons, vol. 45(5), pages 511-523, August.
    5. Stanisław Gawiejnowicz, 2020. "A review of four decades of time-dependent scheduling: main results, new topics, and open problems," Journal of Scheduling, Springer, vol. 23(1), pages 3-47, February.
    6. C. Ng & Q. Ding & T. Cheng & S. Lam, 2012. "Preemptive repayment policy for multiple loans," Annals of Operations Research, Springer, vol. 192(1), pages 141-150, January.
    7. Kang, Liying & Ng, C.T., 2007. "A note on a fully polynomial-time approximation scheme for parallel-machine scheduling with deteriorating jobs," International Journal of Production Economics, Elsevier, vol. 109(1-2), pages 180-184, September.
    8. Gupta, Sushil & Dutta, Kaushik, 2011. "Modeling of financial supply chain," European Journal of Operational Research, Elsevier, vol. 211(1), pages 47-56, May.
    9. Anjulika Gupta & Prabha Sharma & Hemant Salwan, 2018. "A local search algorithm: minimizing makespan of deteriorating jobs with relaxed agreeable weights," EURO Journal on Computational Optimization, Springer;EURO - The Association of European Operational Research Societies, vol. 6(1), pages 29-54, March.
    10. Anna Arigliano & Gianpaolo Ghiani & Antonio Grieco & Emanuela Guerriero, 2017. "Single-machine time-dependent scheduling problems with fixed rate-modifying activities and resumable jobs," 4OR, Springer, vol. 15(2), pages 201-215, June.
    11. Yasmin Agueda Rios-Solis & Mario Alberto Saucedo-Espinosa & Gabriel Arturo Caballero-Robledo, 2017. "Repayment policy for multiple loans," PLOS ONE, Public Library of Science, vol. 12(4), pages 1-12, April.
    12. Voutsinas, Theodore G. & Pappis, Costas P., 2002. "Scheduling jobs with values exponentially deteriorating over time," International Journal of Production Economics, Elsevier, vol. 79(3), pages 163-169, October.
    13. S Gawiejnowicz & W-C Lee & C-L Lin & C-C Wu, 2011. "Single-machine scheduling of proportionally deteriorating jobs by two agents," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(11), pages 1983-1991, November.
    14. Qian, Jianbo & Steiner, George, 2013. "Fast algorithms for scheduling with learning effects and time-dependent processing times on a single machine," European Journal of Operational Research, Elsevier, vol. 225(3), pages 547-551.
    15. A A K Jeng & B M T Lin, 2004. "Makespan minimization in single-machine scheduling with step-deterioration of processing times," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(3), pages 247-256, March.

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