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Inventory dynamics in process industries: An empirical investigation
Stockholm University, Faculty of Social Sciences, Stockholm Business School.
Number of Authors: 3
2017 (English)In: International Journal of Production Economics, ISSN 0925-5273, E-ISSN 1873-7579, Vol. 191, 253-266 p.Article in journal (Refereed) Published
Abstract [en]

Process industry firms have thrived in recent decades, but changes in the markets are currently putting both growth and profitability at risk. In this context, inventory management is increasingly viewed as an essential lever for creating a sustainable competitive advantage. Despite this, many firms struggle to implement best practices because of industry-specific constraints. This research explores how seven fundamental characteristics of process industries drive inventory performance. We empirically investigate four process industries and four peer industries, using financial accounting, credit rating, stock market and trading data and implement a seemingly unrelated regression (SUR) equations model. Our results show that capital intensity, capital costs, transportation costs, delivery time, price volatility, demand uncertainty and gross margin directly affect a company's degree of freedom in terms of inventory management and illustrate that inventory management in process industries follows different dynamics. This study enhances the understanding of inventory drivers and gives practitioners a tool to guide future improvement efforts.

Place, publisher, year, edition, pages
2017. Vol. 191, 253-266 p.
Keyword [en]
Inventory performance, Process industries, Inventory drivers, Econometrical analysis
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:su:diva-147897DOI: 10.1016/j.ijpe.2017.06.019ISI: 000409150000021OAI: oai:DiVA.org:su-147897DiVA: diva2:1150882
Available from: 2017-10-20 Created: 2017-10-20 Last updated: 2017-11-03Bibliographically approved

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Isaksson, Olov H. D.
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