NABE Silicon Valley RoundTable

NABE Silicon Valley RoundTable

NABE's U.S. Economic Outlook

Speaker(s):  Duncan Meldrum, President, NABE
Meeting date:  March 9, 2004

Duncan Meldrum is the chief economist for Air Products and Chemicals, Inc., and president of the National Association for Business Economics.  As chief economist of Air Products and Chemicals, he assesses the impact of the economic environment on the companyís performance for the executive management team and develops global economic assumptions for the companyís operating plans.  He provides operating groups with pricing assistance, contract support and market analyses.  He also serves as the companyís economics spokesperson.

He received a B.S. degree from the U.S. Naval Academy in 1973, a M.S. degree in Operations Research from the U.S. Naval Postgraduate School in 1974, and a Ph.D. in Economics from Lehigh University in 1992.

Meldrum was elected President of the National Association for Business Economics (NABE) for the year beginning September 2003.  A NABE board member since 1999, he has headed the industry survey team, co-chaired the 2002 Annual Meeting, and served as vice president for 2002-2003.  He has published a number of articles covering topics such as country risk analysis and the practice of business economics at an industrial firm.  He is a member of the U.S. Census Bureau Advisory Committee of Professional Associations and serves as a director on the boards of the APCI Federal Credit Union.

Falling inventory/sales ratios

Quantitative inventory management is almost 50 years old. Why are we seeing dramatic decreases in inventory-to-sales ratios over the past few years? I have two theories:
First, the optimum inventory computations rely on expected sales as an input. Itís probably easier to predict sales when most buyers are pessimistic. The general negative feelings among buyers over the past few years may have made forecasting easier.
Second, the diffusion of information technology may have become widespread enough that all the information needed to accurately asses the inventory is now available. Maybe the upgrades that were made to correct the Y2K problem finally integrated systems enough that it finally works.
Anybody have any hard data?

-- Al Moon, March 18, 2004  Reply
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