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Note---On the Cyert-Davidson-Thompson Doubtful Accounts Model

Author

Listed:
  • Jos A. M. van Kuelen

    (Erasmus University, Rotterdam)

  • Jaap Spronk

    (Erasmus University, Rotterdam)

  • A. Wayne Corcoran

    (Baruch College and University of Massachusetts)

Abstract

The results of the classical Cyert, Davidson, and Thompson (CDT) model for estimating the allowance for doubtful accounts could be made more valuable by correcting one flaw. The CDT model rests on the total balance method of aging dollars and, as presented, its answers cannot wisely be applied to estimate real dollar amounts. Notably, the steady state distributions derived by the model tend to underestimate actually paid dollar amounts.

Suggested Citation

  • Jos A. M. van Kuelen & Jaap Spronk & A. Wayne Corcoran, 1981. "Note---On the Cyert-Davidson-Thompson Doubtful Accounts Model," Management Science, INFORMS, vol. 27(1), pages 108-112, January.
    • Handle: RePEc:inm:ormnsc:v:27:y:1981:i:1:p:108-112
    DOI: 10.1287/mnsc.27.1.108
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    Citations

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    Cited by:

    1. Schechtman, Ricardo, 2013. "Default matrices: A complete measurement of banks’ consumer credit delinquency," Journal of Financial Stability, Elsevier, vol. 9(4), pages 460-474.
    2. Arno Botha & Conrad Beyers & Pieter de Villiers, 2020. "The loss optimisation of loan recovery decision times using forecast cash flows," Papers 2010.05601, arXiv.org.
    3. Dariusz Wędzki, 2007. "Trade credit portfolio selection – a markovian approach," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 17(2), pages 105-119.
    4. Tangsucheeva, Rattachut & Prabhu, Vittaldas, 2014. "Stochastic financial analytics for cash flow forecasting," International Journal of Production Economics, Elsevier, vol. 158(C), pages 65-76.
    5. Thomas, Lyn C., 2000. "A survey of credit and behavioural scoring: forecasting financial risk of lending to consumers," International Journal of Forecasting, Elsevier, vol. 16(2), pages 149-172.

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