The Effect Of A Changing Market Mix In Seed Corn On Inventory Costs
AbstractChanging product characteristics are causing U.S. seed corn companies to reevaluate their inventory strategies. A simulation model based upon the Economic Order Quantity model is built in @Risk to reflect a shortened product life cycle and product proliferation. Inventory costs levels increase because of increased uncertainty of demand. Empirical results find that shortening the product life cycle and expanding the product line increases total inventory costs by 120.8%, increases the average inventory level (primarily due to added safety stock) by 56.2%, and increases the cost of carryover, stockout cost, and safety stock cost by 143, 165, and 119 %, respectively. To maintain higher levels of customer service with products displaying shorter life cycles, more safety stock must be held to guard against stockouts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2001 Annual meeting, August 5-8, Chicago, IL with number 20741.
Date of creation: 2001
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Magnier, Alexandre & Kalaitzandonakes, Nicholas G. & Miller, Douglas J., 2010. "Product Life Cycles and Innovation in the US Seed Corn Industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 13(3).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.