Econometrica: Apr 1957, Volume 25, Issue 2
The Theory of Inventory Decisions
Edwin S. MillsThis article is an attempt to determine whether firms can be assumed to behave as if they were using a rational inventory policy. A decision rule is deduced from a plausible model of a firm's cost structure and an attempt is made to see whether historical time series of firms' production, sales, and inventory data can be explained by such a decision rule.
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