REPLY Age of material in a stock (SD6442)

[SDMAIL Fred Nickols]

Posted by  "Fred Nickols" <nickols at att.net>

Douglas Franco provides an example of how incentives can confound a
situation.

>> A company sells appliances in a poor neighborhood by monthly payments,

In the example above, Douglas asserts the existence of a "wrong measure of
the stock of outstanding bills."  I'm curious.  Could you please say some
more about (a) what the measure was and (b) why it was the "wrong" measure?

I ask because I can see quite clearly from the example how the incentive
could lead to an increased stock of due (overdue or past due?) bills, but I
don't quite see what the measure was or why it was the wrong one.

Thanks...

Fred Nickols
Posted by  "Fred Nickols" <nickols at att.net>
posting date  Thu, 17 May 2007 09:07:30 -0400