Firms often finance their inventory through debt and subsequently sell it to generate profits and service the debt. Pricing of products is consequently driven by both inventory and debt servicing considerations. We show that limited liability under debt induces sellers to charge higher prices...

We study a seller that starts with an initial inventory of goods, has a target horizon over which to sell the goods, and is subject to a set of financial <i>milestone</i> constraints on the revenues and sales that need to be achieved at different time points along the sales horizon. We characterize the...