In eight pages supply and demand side economic theories are discussed in a consideration of business inventory cycles and their effects upon the economy. Four sources are listed in the bibliography.
Name of Research Paper File: TS14_TEinvcyc.rtf
Unformatted Sample Text from the Research Paper:
cycle is a term that is used in relationship to both an economy as a whole as well as for the more individual company analysis. The first stage of any
paper that looks at inventory cycles must be to define what this actually means. There are several ways of looking at it, but all lead to the same conclusion. Any
company needs to keep stock, this may be the raw materials used to make manufactured goods through to the finish goods before they are sold on. In theory the inventory
cycle is the entire process for getting stock in and then passing it on. In other words the inventory cycle is time is takes for the inventory to be turned
over. There are several ways that this may be calculated, the most common is to take the stock value and see how many times this fits into the companies
turnover. This will indicate the length of the inventory cycle. For example, if a company has a turnover of 10 million, and an inventory of 1 million, as 10/1 is
10, there is a turnover of the inventory 10 times a year. This higher the level of stock with a lower turnover rate the higher the working capital that
is required for the company, as there is more capital up in stock. Lower stocks may show a lower need for capital, and also a faster turnover due to the
lower levels. Therefore, it is also argued that the inventory./ The business decision behind inventory levels are contradictory, on one hand the lower the stock levels the lower the
amount of capital tied up, capital which will have an opportunity costs, and may fund other areas of growth. Conversely, there is also the need to ensure that the inventory