Simultaneous determination of inventories and accounts receivable

Muhammad Ayub Mehar

Managerial and Decision Economics, 2005, vol. 26, issue 4, 259-269

Abstract: 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.

Date: 2005
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Working Paper: SIMULTANEOUS DETERMINATION OF INVENTORIES AND ACCOUNTS RECEIVABLE (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:26:y:2005:i:4:p:259-269

DOI: 10.1002/mde.1221

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