Input and Output Inventories

Brad Humphreys, Louis John Maccini () and Scott Schuh

Economics Working Paper Archive from The Johns Hopkins University,Department of Economics

Abstract: This paper presents a new stage-of-fabrication inventory model with ordering usage and stocking of input materials that distinguishes between gross production and value added It extends the traditional linear-quadratic model of output (finished goods) inventories by adding joint determination of input inventories which largely have been ignored Empirically input inventories are more important than output inventories especially in business cycle fluctuations Maximum likelihood estimation of the decision rules yields relatively strong support for the model using data for nondurable and durable good industries The value added specification outperforms gross production because adjustment costs on the change in materials usage are critical to fitting the data

Date: 2000-01

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Related works:
Working Paper: Input and Output Inventories (1997)
Working Paper: Input and output inventories (1997)
Journal Article: Input and output inventories (2001)
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Persistent link: http://EconPapers.repec.org/RePEc:jhu:papers:426

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