It is well-known that production is more variable than sales in the United States. Our international evidence, however, shows that this stylized fact in the United States is not necessarily universal, although a similar finding can be observed in most industrial countries. To account for the findings, we regress the relative variability of production to sales on several economic variables. We find that the relative magnitudes of cost shocks to demand shocks as well as serial correlations in demand are important in explaining the relative variability of inventory to production. We also find that inventory tends to be counter-cyclical in the country where the weights of agriculture, mining, wholesale-retail, and transportation-communication sectors are large.