The Effects of Valuation Techniques on Holding Cost During Inflationary Periods: A Simulation Exercise

Abstract

The purpose of this paper is to study the effects of different inventory valuation techniques on holding costs during inflationary periods by means of Monte Carlo Simulation. In the first sections of this paper the topics of simulation and inventory valuation are presented as background material. The remaining sections report on the inventory model used, the modifications made to the model, and the simulation results.