Stock management after catastrophe the economics of hold or destroy |
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Authors: | John B Westwood A Geoffrey Lockett K Pennycuick |
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Institution: | Manchester Business School, Booth Street West, Manchester M15 6PB, England |
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Abstract: | The problem of stock control after a dramatic decrease in demand is considered. This paper presents cash flow models of hold or destroy which are appropriate in such a situation. Certain assumptions are made which enable a simple model to be produced which takes into account the effects of inflation and incorporates cash-flow discounting. The results from this are then compared with some common heuristics and are found to have lower costs in every case. |
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