Inventory Control and Intermediation in Global Supply Chains

Arbeitspapier

The paper develops a simple theoretical model of inventory control in global supply chains. It identifies a role for intermediaries in managing inventory, and shows that inserting an intermediary as an additional link in a supply chain is profitable when demand volatility is high. It also provides conditions under which the intermediary handling inventory is located in the exporting versus the importing country. Trade liberalization in the form of less lumpy trade is shown to expand the role of export and import intermediaries but to have potentially negative effects on the volume of international trade and social welfare in the importing country.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5269

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Multinational Firms; International Business ; Firm Organization and Market Structure
• Subject: international trade ; supply chain ; inventory ; intermediation ; lumpy trade

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Qu, Zhan ; Raff, Horst ; Schmitt, Nicolas
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/108810
• Last update: 10.03.2025, 11:45 AM CET