We consider distribution systems with a central warehouse and many retailers that stock a number of different products. Deterministic demand occurs at the retailers for each product. The warehouse acts as a break-bulk center and does not keep any inventory. The products are delivered from the...

This paper proposes a theory of financial intermediaries as collateralization specialists that are better able to collateralize claims than other lenders. Intermediaries require capital as they can borrow against their loans only to the extent that other lenders themselves can collateralize the...

Consistent with recent theoretical models where binding capital constraints lead to sudden liquidity dry-ups, we find that negative market returns decrease stock liquidity, especially during times of tightness in the funding market. The asymmetric effect of changes in aggregate asset values on...

Collateral constraints imply that financing and risk management are fundamentally linked. The opportunity cost of engaging in risk management and conserving debt capacity to hedge future financing needs is forgone current investment, and is higher for more productive and less well-capitalized...

We build a model of the financial sector to explain why adverse asset shocks in good economic times lead to a sudden drying up of liquidity. Financial firms raise short-term debt in order to finance asset purchases. When asset fundamentals worsen, debt induces firms to risk-shift; this limits...

In this paper, we address the problem of forecasting and managing the inventory of service parts where the demand patterns are highly intermittent. Currently, there are two classes of methods for determining the safety stock for the intermittent item: the parametric and bootstrapping approaches....

We consider a deterministic model of the manufacturing system with product recovery. Two types of policies for the problem had been proposed in literature, namely the (1,R) policy, in which one manufacturing setup is followed by R remanufacturing setups and the (P,1) policy, which has P...

We develop a dynamic model of investment, capital structure, leasing, and risk management based on firms' need to collateralize promises to pay with tangible assets. Both financing and risk management involve promises to pay subject to collateral constraints. Leasing is strongly collateralized...

We study the relative effectiveness of top-down (TD) and bottom-up (BU) strategies for forecasting the aggregate demand in a production planning framework. The aggregate demand series is composed of several correlated subaggregate components (or items), each of which is assumed to follow a...