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Evidence of improved inventory control

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  • Dan M. Bechter
  • Stephen Stanley

Abstract

Inventory data applied to a standard partial stock-adjustment model demonstrate that inventory control, defined by desired marginal inventory-sales ratios and speeds of adjustment, improved in the last decade or so, particularly in the manufacturing sector. In addition, the evidence suggests that, contrary to popular wisdom, the net effect of these changes in inventory control has been to increase the volatility of inventory investment in both the manufacturing and trade sectors.

Suggested Citation

  • Dan M. Bechter & Stephen Stanley, 1992. "Evidence of improved inventory control," Economic Review, Federal Reserve Bank of Richmond, vol. 78(Jan), pages 3-12.
    • Handle: RePEc:fip:fedrer:y:1992:i:jan:p:3-12:n:v.78no.1
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    File URL: https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich199201.pdf
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    References listed on IDEAS

    as
    1. Blinder, Alan S & Maccini, Louis J, 1991. "The Resurgence of Inventory Research: What Have We Learned?," Journal of Economic Surveys, Wiley Blackwell, vol. 5(4), pages 291-328.
    2. Stephen L. Able & Dan M. Bechter, 1979. "Inventory recession ahead?," Economic Review, Federal Reserve Bank of Kansas City, vol. 64(Jul), pages 7-19.
    3. Irvine, F Owen, Jr, 1981. "Retail Inventory Investment and the Cost of Capital," American Economic Review, American Economic Association, vol. 71(4), pages 633-648, September.
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    Citations

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    Cited by:

    1. Joel H. Steckel & Sunil Gupta & Anirvan Banerji, 2004. "Supply Chain Decision Making: Will Shorter Cycle Times and Shared Point-of-Sale Information Necessarily Help?," Management Science, INFORMS, vol. 50(4), pages 458-464, April.
    2. Irvine, F. Owen, 2003. "Problems with using traditional aggregate inventory to sales ratios," International Journal of Production Economics, Elsevier, vol. 81(1), pages 41-50, January.
    3. Marwan Chacra & Maral Kichian, 2004. "A Forecasting Model for Inventory Investments in Canada," Staff Working Papers 04-39, Bank of Canada.
    4. Irvine, F. Owen, 2003. "Long term trends in US inventory to sales ratios," International Journal of Production Economics, Elsevier, vol. 81(1), pages 27-39, January.

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    Keywords

    Inventories;

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