Shibayama, Katsuyuki; Chadha, Jagjit S. - School of Economics, University of Kent - 2013
decreases output volatility relative to sales volatility, lower levels of inventories actually increases sales volatility … and inventory facts well. Under the stockout constraint, inventories and demand are complements in generating sales, and … hence the optimal level of inventories increases in expected demand. We also show that the inventory to sales ratio is both …
