Simultaneous determination of inventories and accounts receivable
The study presents a model based on 3375 observations from industrial firms in Pakistan, and the three-stage least square (3SLS) technique has been applied for the estimation. The results indicate that the economic order quantity (EOQ) of inventories is not a constant magnitude; it is a variable closely associated with 'time trend'. While the 'buffer stock' element can be estimated through the constant term of an equation. Receivables from customers show a negative correlation with liquid assets and the cost of production. Receivables are also shown to act as substitute for closing inventories. Copyright © 2005 John Wiley & Sons, Ltd.
Volume (Year): 26 (2005)
Issue (Month): 4 ()
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