Value-Based Inventory Management
Value-Based Inventory Management, Journal of Economic Forecasting, 9/1, 82-90, 2008
9 Pages Posted: 7 Jan 2008 Last revised: 3 Jan 2013
Date Written: January 3, 2013
Abstract
The basic financial purpose of a firm is to maximize its value. An inventory management system should also contribute to realization of this basic aim. Many current asset management models currently found in financial management literature were constructed with the assumption of book profit maximization as basic aim. However these models could lack what relates to another aim, i.e., maximization of enterprise value. This article presents a modified value-based inventory management model.
Keywords: Inventory Management, Value based management, Liquidity measures, Demand for Liquidity, Liquidity balances, Risk, Uncertainty, Real Options, Option Value of Liquidity, Short-Term Financial Management, Working Capital Management
JEL Classification: G32, G11, M11, D81, O16, P33, P34
Suggested Citation: Suggested Citation