Download or read book The Production Smoothing Model of Inventories Revisited written by Alistair Milne and published by . This book was released on 1992 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Seasonality Cost Shocks and the Production Smoothing Model of Inventories written by Jeffery A Miron and published by . This book was released on 1986 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Seasonality Cost Shocks and the Production Smoothing Model of Inventories written by and published by . This book was released on 1989 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: A great deal of research on the empirical behavior of inventories examines some variant of the production smoothing model of finished goods inventories. The overall assessment of this model that exists in the literature is quite negative: there is little evidence that manufacturers hold inventories of finished goods in order to smooth production patterns. This paper examines whether this negative assessment of the model is due to one or both of two features: costs shocks and seasonal fluctuations. The reason for considering costs shocks is that if firms are buffeted more by cost shocks than demand shocks, production should optimally be more variable than sales. The reasons for considering seasonal fluctuations are that seasonal fluctuations account for a major portion of the variance in production and sales, that seasonal fluctuations are precisely the kinds of fluctuations that producers should most easily smooth, and that seasonally adjusted data is likely to produce spurious rejections of the production smoothing model even when it is correct. We integrate cost shocks and seasonal fluctuations into the analysis of the production smoothing model in three steps. First, we present a general production smoothing model of inventory investment that is consistent with both seasonal and non-seasonal fluctuations in production, sales, and inventories. The model allows for both observable and unobservable changes in marginal costs. Second, we estimate this model using both seasonally adjusted and seasonally unadjusted data plus seasonal dummies. The goal here is to determine whether the incorrect use of seasonally adjusted data has been responsible for the rejections of the production smoothing model reported in previous studies. The third part of our approach is to explicitly examine the seasonal movements in the data. We test whether the residual from an Euler equation is uncorrelated with the seasonal component of contemporaneous sales. Even if unobservable seasonal cost shocks make the seasonal v.

Download or read book Can the Production Smoothing Model of Inventory Behavior be Saved written by Alan S. Blinder and published by . This book was released on 1984 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: The production smoothing model of inventory behavior has a long and venerable history, and theoretical foundations which seem very strong. Yet certain overwhelming facts seem not only to defy explanation within the production smoothing framework, but actually to argue that the basic idea of production smoothing is all wrong. Most prominent wnong these is the fact that the variance of detrended production exceeds the variance of detrended sales. This paper first documents the stylized facts. Then it derives the production smoothing model rigorously and explains how the model can be amended to make it consistent with the facts. Next, estimates of stock adjustment equations derived from the theory are presented and evaluated. Finally, it reviews the theoretical and empirical evidence and tries to drawsome tentative conclusions.

Download or read book Seasonality Cost Shocks and the Production Smoothing Model of Inventories written by Stephen P. Zeldes and published by . This book was released on 2007 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: A great deal of research ...

Download or read book Some Empirical Evidence on the Production Level and Production Cost Smoothing Models of Inventory Investment written by Martin S. Eichenbaum and published by . This book was released on 1988 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: The production smoothing model of inventories has long been the basic paradigm within which empirical research on inventories has been conducted The basic hypothesis embedded In this model IS that inventories of finished goods serve primarily to smooth production levels in the face of fluctuating demand and convex cost functions. However once we allow for shocks to technology and the costs of producing output firms will also use inventories to shift production from periods in which production costs are relatively high to periods in which production costs are relatively low. In this sense inventories can serve to smooth production costs rather production levels. In this paper we examine the empirical plausibility of the production level and production cost smoothing models of inventories. Our basic strategy is to derive and contrast a set of unconditional moment restrictions Implied by these models in a way that minimizes the role of auxiliary assumptions regarding market structure and Industry demand. We find overwhelming evidence against the production level smoothing model and very little evidence against the production cost smoothing mode1 We conclude that the variance of production exceeds the variance of sales in most manufacturing industries because the production cost smoothing role of inventories is quantitatively more important than the production level smoothing role of inventories.

Download or read book Seasonality Cost Shocks and the Production Smoothing Model of Inventories written by and published by . This book was released on 1987 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Hybrid Production Smoothing Model of Inventories written by Alistair Milne and published by . This book was released on 1990 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book On Saving the Production Smoothing Model of Inventory Behavior written by C. Y. Cyrus Chu and published by . This book was released on 1986 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Two Studies of Inventory Investment written by Valerie Ann Ramey and published by . This book was released on 1987 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Comparison of Production Smoothing Model and a Dynamic Factor Demand Model with Inventories written by H. M. M. Peeters and published by . This book was released on 1994* with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Staggered Prices and Inventories written by Andreas Hornstein and published by . This book was released on with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Federal Reserve Bank of Richmond presents the full text of the December 11, 1998 working paper entitled "Staggered Prices and Inventories: Production Smoothing Reconsidered," written by Andreas Hornstein and Pierre-Daniel G. Sarte. The text is available in PDF format. This paper examines the implications of staggered prices in a framework where firms use inventories to smooth production. The authors find that if firms can hold inventories, nominal demand shocks will have consistent effects on sales, but not always on production.

Download or read book A Production Smoothing Model of Aggregate Inventory Behavior with Expectation Errors Generated by Model Uncertainty written by Jeffrey C. Fuhrer and published by . This book was released on 1986 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Inventory Production Theory written by C.A. Schneeweiss and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: The term inventory-production theory is not well defined. It com prises e. g. such models like cash balance models, production smoothing models and pure inventory models. We shall here mainly be concerned with stochastic dynamic problems and shall give exact definitions in the next section. Most of our work will concentrate on cash balance models. However, production smoothing situations and pure inventory problems will also be investigated. Since we are faced in principle with dynamic stochastic situa tions a dynamic programming approach would be appropriate. This approach, however, due to computational restraints, is limited to only but the simplest models. Therefore, in practice, one ruduces stochastics just in taking forecasts of demand and then treating the problem as a deterministic optimization problem. In addition one often introduces certain safety stocks to safeguard the system from possible forecasting errors. In general, this proce dure is suboptimal. However, there exists one particular situa tion when a separation in a forecasting procedure and a subse quent optimization of the remaining deterministic model is not suboptimal. This is known as the linear-quadratic model, i. e. a model having linear system equations and a quadratic cost crite rion. For this type of model H. A. Simon ~3J and later H. Theil [25J have shown that the above separation property holds. In fact, Simon's and Theil's results are nothing else but what has later and more generally become known to control engineers as Kalman's famous separation principle.

Download or read book Inventories Production Smoothing and Anticipated Demand Variations written by Satyajit Chatterjee and published by . This book was released on 1993 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Inventories Production Smoothing and the Shape of the Cost Function written by Marzio Galeotti and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we present estimates of inventory models based on firm level panel data and investigate whether an over-simplified specification of the production technology may account for the failure to find technological incentives to smooth production in the context of the standard linear-quadratic model of inventory behavior. In particular, we argue that if the role of quasi-fixed factors is not modelled properly, this may lead to inconsistent estimates of marginal costs and, therefore, to erroneous conclusions about the convexity/concavity of the cost function. The model is accordingly extended to allow for a general restricted quadratic cost function, on the assumption that capital is costly to adjust. The evidence obtained by estimating the standard inventory model on a panel of Italian manufacturing firms suggests that marginal costs are decreasing. This result is overturned when one allows for the general quadratic cost function with capital as a quasi-fixed input, however, implying that the firm's technology provides incentives to smooth production. The conclusion that the cost function is convex in output is robust to allowing for adjustment costs for both capital and labor.

Download or read book Inventories Production Smoothing and the Accelerator written by Moheb Ghali and published by . This book was released on 1974 with total page 157 pages. Available in PDF, EPUB and Kindle. Book excerpt: