An absorbing Markov chain for accounts receivables
نویسندگان
1 Department of Mathematics, College of Science, Qassim University, Buraydah 51452, Saudi Arabia.
2 Department of Industrial and Systems Engineering, Southern Polytechnic College of Engineering and Engineering Technology, Kennesaw State University, US.
3 Applied Mathematics Department, Ayandegan Institute of Higher Education, Tonekabon, Iran.
doi
10.22105/jarie.2024.452952.1605چکیده
This paper presents a case study that examines the nature and extent of timely payment of customer transactions on account of a Lean manufacturing organization. A discrete-time absorbing Markov chain model is applied as a tool for analyzing five transient states (new transaction, one-month overdue, two-months overdue, three months overdue, and four months overdue) and two competing absorbing states (paid in full and bad debt write-off). By employing a first-order Markov chain, transient states in the collections process are modeled by periods beginning with the completion of a new transaction. Ordinary Markov chain calculations are performed to determine the expected status of accounts receivables collections.
