%K 3SLS; Inventory Control; Economic Order Quantity; Buffer Stock
%D 2001
%T SIMULTANEOUS DETERMINATION OF INVENTORIES AND ACCOUNTS RECEIVABLE
%L mpra361
%P 259-269
%X The study presents a model based on 3,375 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.
%A Mehar Ayub