In the 1990s, there was widespread adoption of just-in-time inventory techniques by U.S. businesses, which are techniques that companies use to keep inventories from running out or building up beyond desired levels. The Internet has facilitated the implementation of many just-in-time inventory techniques. When a company that supplies basic components used in a variety of electronic products experiences an inventory buildup, it has several options for reducing its inventory via the Internet. The company could offer some of its inventory for sale on organized business-to-business exchanges that handle total transactions exceeding $1 trillion per year. In addition, it could use computer programs offered by Ariba and Commerce One to operate its own Internet auctions to sell its inventory to the highest bidders. Alternately, the company can purchase the Web-auction services of eBay or other firms to assist in selling off some of its inventory. 

Considerable evidence shows that the use of the Internet-based just-in-time inventory techniques have contributed to the noticeable decline in the ratio of inventories to sales in U.S. manufacturing. In 1990, the inventory-to-sales ratio was about 1.75, which means that U.S. companies had about $175 in inventory for every $100 in sales. Sixteen years later the ratio had fallen to 1.35.

What effect would this decline in the inventory-to-sales ratio have had on U.S. inventory investment?