This paper addresses the question of whether an (S, s) inventory management model, combined with a stockout‐avoidance mechanism, is appropriate for explaining the inventory process for oil refining. The analysis uses a fixed‐proportion production function to model dynamic profit maximisation in crude oil refining. The model distinguishes the use of production crude oil from crude oil inventories as inputs into oil refining. The result is a relationship between oil production, oil inventory and the difference between the prices of crude oil and refined petroleum products. Estimation results indicate that the (S, s) model is consistent with data measuring crude oil inventory management and results also imply a modest stockout‐avoidance mechanism.

中文翻译：

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存量和流量-石油精炼存量

本文讨论的问题是，（S，s）库存管理模型与缺货回避机制相结合是否适合解释炼油的库存过程。该分析使用固定比例生产函数对原油精炼中的动态利润最大化进行建模。该模型区分了使用生产原油和原油库存作为炼油的投入。结果是石油产量，石油库存与原油和精炼石油产品价格之间的差异之间存在关系。估计结果表明（S，s）模型与衡量原油库存管理的数据一致，并且结果还暗示着适度的缺货回避机制。