Estimation of the Allowance for Doubtful Accounts by Markov Chains
Investigation of more accurate and efficient methods of estimating the allowance for doubtful accounts was begun in the early 1950's by R. M. Cyert and R. M. Trueblood [Cyert, R. M., R. M. Trueblood. 1957. Statistical sampling techniques in the aging of accounts receivable in a department store. Management Sci. 3 (2, January) 185-195.]. At this time, studies were confined primarily to investigation of more efficient methods of performing the first step in the estimation procedure: determining the age distribution of accounts. In particular, the applicability of statistical sampling techniques was evaluated. A number of retail establishments now use scientific sampling methods to perform the first step in the estimation of the allowance for doubtful accounts. As a continuation of research, the second phase of the allowance estimation problem was a logical area for investigation. While it did not seem likely that all of the judgment factors involved in the setting of loss expectancy rates could be eliminated, it did appear feasible to develop a scientific approach to determining these rates. Accordingly, research into this problem was initiated. This paper discusses a method which has been developed. In addition, some of the managerial implications of the method are discussed.
Volume (Year): 8 (1962)
Issue (Month): 3 (April)
|Contact details of provider:|| Postal: |
Web page: http://www.informs.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:8:y:1962:i:3:p:287-303. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.