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Fair Assignment of Debt Cases to Legal Debt Collection Centers

In: New Perspectives in Operations Research and Management Science

Author

Listed:
  • Elmira Farrokhizadeh

    (Istanbul Technical University)

  • Sara Ghazanfari Khameneh

    (Istanbul Technical University)

  • Nilüfer Altinok

    (Istanbul Technical University)

  • Ahmet Tezcan Tekin

    (Istanbul Technical University)

  • Basar Oztaysi

    (Istanbul Technical University)

  • Özgür Kabak

    (Istanbul Technical University)

  • Sezi Çevik Onar

    (Istanbul Technical University)

  • Aslıhan Ceren Tari

    (Istanbul Technical University)

  • Özge Gencer Aydemir

    (Istanbul Technical University)

  • Ersan Öztürk

    (Istanbul Technical University)

Abstract

Nowadays, unpaid invoices are major concerns in many industries or service companies that seriously affect firms’ cash flows, credit ratings, and firms’ image. To overcome the financial problems caused by unpaid debts, managing and controlling these debts is a vital task for companies’ financial survival. Unpaid receivables are collected by the company or debt collection agency as a third party. The debt collection process consists of the collection phase and the legal phase. When the debt collectors are unsuccessful in obtaining the long-term unpaid receivables in the collection phase; the debts will be transferred to the legal debt collection agencies as the legal phase and carried out by experienced lawyers. In order to initiate the legal phase, the unpaid receivables, the so-called cases, are assigned legal collection agencies based on the features of both cases and agencies. In this study, a fair assignment model is built to allocate the customer cases to legal debt collection agencies to prevent company from increasing unpaid debts and manage the legal debt collection process effectively. This model maximizes the advantage of assigning in the same city or region considering the cost, capacity, and equality of each legal debt collection agency in getting the outstanding debts. Budget of the agencies and the number of the cases in the same city are balanced to have a fair assignment. The model is validated by an application in a big service company in Turkey.

Suggested Citation

  • Elmira Farrokhizadeh & Sara Ghazanfari Khameneh & Nilüfer Altinok & Ahmet Tezcan Tekin & Basar Oztaysi & Özgür Kabak & Sezi Çevik Onar & Aslıhan Ceren Tari & Özge Gencer Aydemir & Ersan Öztürk, 2022. "Fair Assignment of Debt Cases to Legal Debt Collection Centers," International Series in Operations Research & Management Science, in: Y. Ilker Topcu & Şule Önsel Ekici & Özgür Kabak & Emel Aktas & Özay Özaydın (ed.), New Perspectives in Operations Research and Management Science, pages 1-29, Springer.
    • Handle: RePEc:spr:isochp:978-3-030-91851-4_1
    DOI: 10.1007/978-3-030-91851-4_1
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