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The Value of Inventory Savings

The Value of Inventory Savings Despite the almost universal belief to the contrary, inventoryreduction should not be a major objective for investing in advancedmanufacturing technology because the financial benefits from it can berelatively small compared with other benefits. This article describeshow changes in inventory are valued and why inventory reductions canhave a complex, and often negative, effect on profitability. Highinventory levels are only a symptom of other problems if these problemsare not first identified and solved, inventory reductions can becounterproductive. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Operations & Production Management Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0144-3577
DOI
10.1108/01443579210011435
Publisher site
See Article on Publisher Site

Abstract

Despite the almost universal belief to the contrary, inventoryreduction should not be a major objective for investing in advancedmanufacturing technology because the financial benefits from it can berelatively small compared with other benefits. This article describeshow changes in inventory are valued and why inventory reductions canhave a complex, and often negative, effect on profitability. Highinventory levels are only a symptom of other problems if these problemsare not first identified and solved, inventory reductions can becounterproductive.

Journal

International Journal of Operations & Production ManagementEmerald Publishing

Published: May 1, 1992

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