Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107905
Authors: 
Qu, Zhan
Raff, Horst
Schmitt, Nicolas
Year of Publication: 
2015
Series/Report no.: 
Kiel Working Paper 1993
Abstract: 
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.
Subjects: 
international trade
supply chain
inventory
intermediation
lumpy trade
JEL: 
F12
F23
L22
Document Type: 
Working Paper

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