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Information as a substitute for inventories

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  • Dudley, Leonard
  • Lasserre, Pierre

Abstract

In 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 Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 33 (1989)
Issue (Month): 1 (January)
Pages: 67-88

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Handle: RePEc:eee:eecrev:v:33:y:1989:i:1:p:67-88

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Web page: http://www.elsevier.com/locate/eer

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Cited by:
  1. Berndt, Ernst R. & Morrison, Catherine J., 1992. "High-tech capital formation and economic performance in U.S. manufacturing industries : an exploratory analysis," Working papers 3419-92., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  2. Cannon, Alan R., 2008. "Inventory improvement and financial performance," International Journal of Production Economics, Elsevier, vol. 115(2), pages 581-593, October.
  3. Fred V. Carstensen & William F. Lott & Stan McMillen, 2003. "The Economic Impact of Connecticut's Information Technology Industry," CCEA Studies 2003-02, University of Connecticut, Connecticut Center for Economic Analysis.
  4. Lal, K., 1996. "Information technology, international orientation and performance: A case study of electrical and electronic goods manufacturing firms in India," Information Economics and Policy, Elsevier, vol. 8(3), pages 269-280, September.

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