Seasonality and the Production-smoothing Model
International Journal of Production Economics
The debate continues over whether firms smooth production relative to demand. In this paper we find that results obtained in Blinder (Quarterly Journal of Economics 101 (3) (1986) 431–453) and Blinder and Maccini (Journal of Economic Surveys 5 (4) (1991) 293–328), indicating that firms do not smooth production, are greatly influenced by the seasonal adjustment of the Census data for US manufacturing.
Using seasonally adjusted data, we find significant evidence of production smoothing in 10 of 14 manufacturing industries for the years 1982–1997.
Further, the prevalence of production smoothing has increased over time, which we attribute either to fundamental changes in the collection of the data or to the advent of improved methods of inventory management.
Copyright © 2000, Elsevier
Gorman, Michael F. and Brannon, James I., "Seasonality and the Production-smoothing Model" (2000). MIS/OM/DS Faculty Publications. 34.