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Article: A Stochastic Inventory Model incorporating intra-year purchases and accounting tax incentives

TitleA Stochastic Inventory Model incorporating intra-year purchases and accounting tax incentives
Authors
KeywordsAccounting
Inventory/production - stochastic models
Inventory/production - approximations
Issue Date1986
PublisherINFORMS. The Journal's web site is located at http://mansci.pubs.informs.org
Citation
Management Science, 1986, v. 32 n. 6, p. 714-730 How to Cite?
AbstractIt has been observed that firms alter year-end inventory policies in response to accounting tax incentives. This study proposes a stochastic ordering policy model which quantifies these effects. An innovative feature is its use of two decision variables: an initial order-up-to-level at the beginning of each year and a desired year-end inventory level. The ability to place a second order after demand has been assessed allows for an explicit consideration of the effects of tax incentives on order quantity decisions. Separate formulations are developed for the two most widely-used inventory accounting methods, LIFO and FIFO. The model provides new implications for choices between LIFO and FIFO, the forms of optimal ordering policies under each and for year-end inventory levels. A procedure is given for calculating the optimal FIFO policy.
Persistent Identifierhttp://hdl.handle.net/10722/152555
ISSN
2015 Impact Factor: 2.741
2015 SCImago Journal Rankings: 4.384
SSRN
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorBiddle, Gary Cen_HK
dc.contributor.authorMartin, RKippen_HK
dc.date.accessioned2012-07-09T09:10:04Z-
dc.date.available2012-07-09T09:10:04Z-
dc.date.issued1986en_HK
dc.identifier.citationManagement Science, 1986, v. 32 n. 6, p. 714-730en_HK
dc.identifier.issn0025-1909en_HK
dc.identifier.urihttp://hdl.handle.net/10722/152555-
dc.description.abstractIt has been observed that firms alter year-end inventory policies in response to accounting tax incentives. This study proposes a stochastic ordering policy model which quantifies these effects. An innovative feature is its use of two decision variables: an initial order-up-to-level at the beginning of each year and a desired year-end inventory level. The ability to place a second order after demand has been assessed allows for an explicit consideration of the effects of tax incentives on order quantity decisions. Separate formulations are developed for the two most widely-used inventory accounting methods, LIFO and FIFO. The model provides new implications for choices between LIFO and FIFO, the forms of optimal ordering policies under each and for year-end inventory levels. A procedure is given for calculating the optimal FIFO policy.en_HK
dc.languageeng-
dc.publisherINFORMS. The Journal's web site is located at http://mansci.pubs.informs.orgen_HK
dc.relation.ispartofManagement Scienceen_HK
dc.subjectAccounting-
dc.subjectInventory/production - stochastic models-
dc.subjectInventory/production - approximations-
dc.titleA Stochastic Inventory Model incorporating intra-year purchases and accounting tax incentivesen_HK
dc.typeArticleen_HK
dc.identifier.emailBiddle, Gary C: biddle@hku.hken_HK
dc.identifier.authorityBiddle, Gary C=rp00230en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1287/mnsc.32.6.714-
dc.identifier.scopuseid_2-s2.0-0022734466en_HK
dc.identifier.volume32en_HK
dc.identifier.issue6en_HK
dc.identifier.spage714en_HK
dc.identifier.epage730en_HK
dc.identifier.isiWOS:A1986C752600006-
dc.publisher.placeUnited Statesen_HK
dc.identifier.ssrn1656245-
dc.identifier.scopusauthoridBiddle, Gary C=6701761934en_HK
dc.identifier.scopusauthoridMartin, RKipp=23094981500en_HK

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