Productivity Measurement for a Distribution Firm
University of British Columbia - Department of Economics; National Bureau of Economic Research (NBER)
Ann Marie Smith
Columbia Distributors, Ltd.
NBER Working Paper No. w4812
The paper derives a consistent accounting framework for the treatment of inventories when measuring the productivity of a distribution firm. The average purchase price of an inventory item during an accounting period must be distinguished from its average selling price and these two average prices should be distinguished from the corresponding balance sheet prices. The accounting framework is implemented for a distribution firm which sold 76,000 separate items. The firm achieved a 9.6 percent per quarter total factor productivity growth rate over 6 quarters.
Number of Pages in PDF File: 17working papers series
Date posted: May 25, 2006
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