Conditional volatility and the production smoothing hypothesis of inventory investment
| Autor: | Isamu Ginama |
|---|---|
| Rok vydání: | 1996 |
| Předmět: |
Inventory control
Economics and Econometrics Multivariate statistics Inventory investment Decision rule Management Science and Operations Research General Business Management and Accounting Buffer stock scheme Industrial and Manufacturing Engineering Production manager Economics Econometrics Smoothing Stock (geology) |
| Zdroj: | International Journal of Production Economics. 45:29-36 |
| ISSN: | 0925-5273 |
| DOI: | 10.1016/0925-5273(96)00051-5 |
| Popis: | This paper introduces a conditional second moment approach to the production smoothing hypothesis of inventory investment. The multivariate ARCH technique makes it possible to calculate the time series of the relevant conditional variances and covariances. The importance of explaining the production and inventory decision rules in terms of the sales anticipation errors is emphasized. The time varying conditional volatility measures suggest that the factors affecting the production and inventory investment are changing over time. It is shown that the buffer stock motive can be the source of production smoothing when firms face unanticipated sales changes, but the stock adjustment behavior may cause production bunching through the intended change in production if the desired stock of inventories is proportional to anticipated sales, and demand shifts are considerably durable. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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