Can holding costs be over-stated for just-in-time manufacturing systems?

Can holding costs be over-stated for just-in-time manufacturing systems?

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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:
Keywords: production: JIT
Abstract:

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.

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