Serial acquisition as a capital budgeting problem

Guilbert C. Hentschke and Ellen Kehoe

Journal of the American Society for Information Science, 1980, vol. 31, issue 5, 357-362

Abstract: This study examines the costs and benefits of purchasing periodicals on a one‐year versus a three‐year subscription basis. The decision problem is viewed as a capital budgeting problem where the objective is cost minimization over a six‐year time span. The variables considered critical to the decision include cost of capital, subscription reorder cost facing the library, annual rate of change of subscription rates, and ratio of three‐year to one‐year subscription costs. The model was developed and applied with the assistance of library managers at the University of Rochester. Results of the study indicate that, even under those conditions most favorable to maintaining a one‐year subscription policy, substantial savings can accrue by shifting to a three‐year subscription policy. The Serials and Binding Department at the University has, as a consequence, shifted to a three‐year purchasing policy for periodicals. Although the model was developed for a specific library system, it is sufficiently general and is simple enough to be applied in other settings without difficulty.

Date: 1980
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jamest:v:31:y:1980:i:5:p:357-362

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