A formula for decisions on retention or disposal of excess stock

J. R. Simpson

Naval Research Logistics Quarterly, 1955, vol. 2, issue 3, 145-155

Abstract: The author proposes a formula for use in deciding whether to retain or sell to the highest bidder large stocks of items of material that appear to exceed demands in the immediate future. Estimates of expected demand, storage cost, percentage return from disposal sales, probability of obsolescence and interest charges are the basic factors employed in the formula. Given these data for an item, and that certain assumptions used in the derivation of the formula are satisfied, one may determine the optimum level of stock to retain.

Date: 1955
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Persistent link: https://EconPapers.repec.org/RePEc:wly:navlog:v:2:y:1955:i:3:p:145-155

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