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.