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The purpose of this paper is to present an integrated model of accounts receivable. The model incorporates the major components of credit and collection policies such as the cash discount, credit period and charges for late payments. It considers the investment in accounts receivable, losses from bad debts and the impact of credit terms on sales. The objective is to maximize the present value of net earnings from accounts receivable. After deriving the general model, a simplified version is solved by classical optimization techniques under various sets of assumptions that are gradually relaxed.

In this paper we construct an optimal pricing strategy for a monopoly with a finite level of a resource (a supply constraint) and competition induced by monopolistic selling price (a demand constraint). The model is first formulated as a general differential game problem. Then, after assumptions regarding competitors' strategy are specified, the problem becomes and is solved as an optimal control problem. It appears that the joint effect of both constraints generates an optimal price trajectory that may only have a local minimum; that is, if it is not monotonic, it will initially decrease and eventually increase.