Open AccessNote—On the Cyert-Davidson-Thompson Doubtful Accounts Model
Author(s) -
Jos A. M. van Kuelen,
Jaap Spronk,
Andrew Corcoran
Publication year - 1981
Publication title -
management science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.954
H-Index - 255
eISSN - 1526-5501
pISSN - 0025-1909
DOI - 10.1287/mnsc.27.1.108
Subject(s) - allowance (engineering) , liberian dollar , economics , econometrics , balance (ability) , mathematical economics , psychology , operations management , finance , neuroscience
The results of the classical Cyert, Davidson, and Thompson (CDT) model for estimating the allowance for doubtful accounts could be made more valuable by correcting one flaw. The CDT model rests on the total balance method of aging dollars and, as presented, its answers cannot wisely be applied to estimate real dollar amounts. Notably, the steady state distributions derived by the model tend to underestimate actually paid dollar amounts.finance: working capital, forecasting: applications, probability: Markov processes