Information as a substitute for inventories
AbstractIn Recent Years, the Ratio of Inventories to Sales in North America Manufacturing Has Fallen Without the Offsetting Increases in Unfilled Orders Or Price Variation That Are Predicted by Some Theoretical Models. the Explanation Offered Here Is That in the Face of Falling Relative Costs of Communications, Firms Will Substitute Information for Inventories, Thereby Allowing Their Production Systems to Absorb a Greated Part of Demand Shocks. the Implicit Hypothesis That the Demands for Communications and Inventories Are Therefore Determined Simultaneously Is Tested with Data on Canadian Inventories and on Telecommunications Between Canada and Europe and Is Not Rejected.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 33 (1989)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/eer
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