SIMULTANEOUS DETERMINATION OF INVENTORIES AND ACCOUNTS RECEIVABLE

Ayub, Mehar (2001): SIMULTANEOUS DETERMINATION OF INVENTORIES AND ACCOUNTS RECEIVABLE. Published in: Managerial and Decision Economics (June 2005): pp. 259-269.

Abstract

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: 3SLS; Inventory Control; Economic Order Quantity; Buffer Stock
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M41 - Accounting; G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting ; Fixed Investment and Inventory Studies ; Capacity

References

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