Information As Substitute for Inventories

Leonard Dudley and Pierre Lasserre

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: In Recent Years, the Ratio of Inventories to Sales in North America Manufacturing Has Fallen Without the Offsetting Increases in Unfilled Orders Or Price Variation That Are Predicted by Some Theoretical Models. the Explanation Offered Here Is That in the Face of Falling Relative Costs of Communications, Firms Will Substitute Information for Inventories, Thereby Allowing Their Production Systems to Absorb a Greated Part of Demand Shocks. the Implicit Hypothesis That the Demands for Communications and Inventories Are Therefore Determined Simultaneously Is Tested with Data on Canadian Inventories and on Telecommunications Between Canada and Europe and Is Not Rejected.

Keywords: Inventories; Communication; Information (search for similar items in EconPapers)
Pages: 33P. pages
Date: 1986
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Journal Article: Information as a substitute for inventories (1989)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:8643

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