Fair Assignment of Debt Cases to Legal Debt Collection Centers

Elmira Farrokhizadeh, Sara Ghazanfari Khameneh, Nilüfer Altinok, Ahmet Tezcan Tekin, Basar Oztaysi, Özgür Kabak*, Sezi Çevik Onar, Aslıhan Ceren Tari, Özge Gencer Aydemir, Ersan Öztürk

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

Nowadays, unpaid invoices are major concerns in many industries or service companies that seriously affect firms’ cash flows, credit ratings, and firms’ image. To overcome the financial problems caused by unpaid debts, managing and controlling these debts is a vital task for companies’ financial survival. Unpaid receivables are collected by the company or debt collection agency as a third party. The debt collection process consists of the collection phase and the legal phase. When the debt collectors are unsuccessful in obtaining the long-term unpaid receivables in the collection phase; the debts will be transferred to the legal debt collection agencies as the legal phase and carried out by experienced lawyers. In order to initiate the legal phase, the unpaid receivables, the so-called cases, are assigned legal collection agencies based on the features of both cases and agencies. In this study, a fair assignment model is built to allocate the customer cases to legal debt collection agencies to prevent company from increasing unpaid debts and manage the legal debt collection process effectively. This model maximizes the advantage of assigning in the same city or region considering the cost, capacity, and equality of each legal debt collection agency in getting the outstanding debts. Budget of the agencies and the number of the cases in the same city are balanced to have a fair assignment. The model is validated by an application in a big service company in Turkey.

Original languageEnglish
Title of host publicationInternational Series in Operations Research and Management Science
PublisherSpringer
Pages1-29
Number of pages29
DOIs
Publication statusPublished - 2022

Publication series

NameInternational Series in Operations Research and Management Science
Volume326
ISSN (Print)0884-8289
ISSN (Electronic)2214-7934

Bibliographical note

Publisher Copyright:
© 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.

Funding

Acknowledgment This work is supported by TUBITAK (The Research Council of Turkey, Project Id: 5200012).

FundersFunder number
Research Council of Turkey
Türkiye Bilimsel ve Teknolojik Araştırma Kurumu5200012

    Keywords

    • Assignment model
    • Debt collection
    • Fair assignment model
    • Legal debt collection
    • Optimization problem

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