He believes that relatively lean inventories mean business executives will have "to run to catch up" when demand is re ignited.

Ford has lean inventories, he said, but the company is concerned mainly with maintaining its market share.

Analysts said the lean inventories and low stock-to-sales ratios near the end of 1996 might clear the way for stronger production in the first quarter.

But lean inventories, while protecting profits, will not deliver strong sales.

The toy industry is always the most extreme indicator of holiday sales patterns, and lean inventories are quite obvious there.

"In an era of lean inventory and tight supply chains, the retailer is better off driving sales when consumers are willing to buy."

Ford continued to have the leanest inventories, with 61 supply days, even though the company has been producing at the limits of its capacity.

They have easy sales comparisons, lean inventories and are operating fewer new stores.

Analysts said lean inventories had led to spot shortages that hurt sales.

Analysts say that retailers, despite already lean inventories, are continuing to cut back, a development affecting many packaged-goods companies.