Productivity Measurement for a Distribution Firm

17 Pages Posted: 25 May 2006 Last revised: 27 Aug 2022

See all articles by W. Erwin Diewert

W. Erwin Diewert

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Ann Marie Smith

Columbia Distributors, Ltd.

Date Written: July 1994

Abstract

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.

Suggested Citation

Diewert, W. Erwin and Smith, Ann Marie, Productivity Measurement for a Distribution Firm (July 1994). NBER Working Paper No. w4812, Available at SSRN: https://ssrn.com/abstract=226512

W. Erwin Diewert (Contact Author)

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Ann Marie Smith

Columbia Distributors, Ltd.

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