| Article ID: | iaor199041 |
| Country: | United States |
| Volume: | 27 |
| Start Page Number: | 11 |
| End Page Number: | 14 |
| Publication Date: | Mar 1986 |
| Journal: | Production and Inventory Management Journal |
| Authors: | Wacker John G. |
| Keywords: | production: JIT |
This article questions the overstatement of holding costs in zero inventory systems epoused by previous researchers. From a theoretical viewpoint, it argues that computation of storage costs, obsolescence costs, and other costs dramatically understate total holding cost. This leads to larger inventories and militates against a zero inventory system.