Transshipments and inventories in the Takayama-Judge model

This paper shows that the Takayama-Judge model to solve interregional and intertemporal market equilibrium conditions faces difficulties when transshipments take place and that the difficulties relating to inventories, pointed out by Guise and others in this Journal, are special cases relating to transshipments. These difficulties can be overcome, simply by relaxing the non-negativity condition imposed on x_ii(t) terms in the material balance conditions.