A new piece of equipment has been purchased in a lot of size m . Some of the items can be used in destructive testing before the item is put into use. Testing uncovers faults which can be removed from the remaining pieces of equipment in the lot. If t õ m pieces of equipment are tested, then those that remain, mt Å m 0 t , have reduced fault incidence and are more reliable than initially, but m...

Theoretical models have been ambiguous on the relationship between industry competition and inventory holdings of manufacturing firms. Facing competition, on the one hand, firms may desire to hold more inventory to avoid losing sales to competitors; on the other hand, firms strive to improve inventory turns to control costs and stay competitive. Using U.S. Census data on manufacturing industrie...