This work was supported by Kuwait University Research Grant No. (SM04/11).
Pricing a stochastic car value depreciation deal†
Article first published online: 24 OCT 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Applied Stochastic Models in Business and Industry
Volume 30, Issue 4, pages 509–516, July/August 2014
How to Cite
2014), Pricing a stochastic car value depreciation deal, Appl. Stochastic Models Bus. Ind., 30, pages 509–516, doi: 10.1002/asmb.2001, and (
- Issue published online: 11 AUG 2014
- Article first published online: 24 OCT 2013
- Manuscript Accepted: 19 SEP 2013
- Manuscript Revised: 18 SEP 2013
- Manuscript Received: 12 SEP 2012
- Poisson process;
- selling time;
This paper deals with pricing a contract under which a dealer buys back a car from a client, for a cash amount contained in a given depreciation table. The value of the car is supposed to depreciate according to a stochastic model with random repairs modeled by a Poisson process. Copyright © 2013 John Wiley & Sons, Ltd.