Variable versus fixed weighted aggregate inventory to sales ratios: the effect on long-term trends for Germany
First online: 25.01.2012
Cite this article as: Obermaier, R. & Donhauser, A. Logist. Res. (2012) 4: 3. doi:10.1007/s12159-012-0068-y
This study is aimed at analyzing the difference of using fixed weight aggregate inventory to sales ratios rather than “traditional”, that is, variable weighted, aggregated inventory to sales ratios. It shows that interpretations of these ratios may be problematic because different aggregation methods are signaling different time trends under certain circumstances. Analyzing the inventory performance of German corporations between 1993 and 2005, we find that the total inventory to sales ratio decreased in a statistically significant extent in the majority of industry sectors during the period investigated. Considering the effects of using fixed aggregation weights on our results, some changes concerning significance of results occur. The additional use of fixed aggregation weights is helpful because it isolates any trends observed in the aggregated inventory to sales ratio series to fluctuations in the underlying (sub) sectors’ inventory to sales ratio, not shifts in the composition of the aggregate.
Inventory Inventory to sales ratios Measurement Trends Time series analysis