The objective of the study is to determine the factors of the optimal level of merchandizing inventory. The study is based on a mathematical model. The results revealed some interesting findings. The most important conclusion is that the 'Usage of Material' or the Sales Volume is not the real determinate of the inventory volume. It is concluded in the model that the volume of inventories depends on the difference between the return on investment in the inventories and the rate of interest on short-term deposits. The traditional methods in cost accounting - Buffer Stock and Economic Order Quantity - have been reconciled with the profit maximization hypothesis.
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
600.
Length: Date of creation: 2000 Date of revision:
2002 Publication status: Published in Conference Proceedings, Cambridge University 2.1(2006): pp. 1-13 Handle: RePEc:pra:mprapa:600
Find related papers by JEL classification: C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Myers, Stewart C., 1984.
"Capital structure puzzle,"
Working papers
1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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