Browsing by Subject "Inventory turnover"

Now showing 1 - 3 of 3

Open Access
Impact of product variety on inventory performance : an empirical analysis of pharmaceutical and medical device industries
(2012) Aydınlı, Ali Yağmur
In this thesis, we construct empirical models to analyze the effect of various financial measures and product variety on inventory performance. We apply multiple regression models and simultaneous equations models using 2010 financial data for 128 U.S. firms in pharmaceutical and medical device industries. Using multiple regression models, we investigate the correlation of inventory turnover with product variety, gross margin, capital intensity and type of the firm. Product variety data are obtained from U.S. Food and Drug Administration. The best multiple regression model explains 38.50% of the total variation in inventory turnover and we observe that inventory turnover is negatively correlated with product variety. Since inventory turnover is the ratio of cost of goods sold (sales) to inventory level, a change in product variety might have an effect both on inventory level and cost of goods sold. In order to investigate the effects of product variety on cost of goods sold and inventory level separately, we employ simultaneous equation models. The best simultaneous equation model explains 96.22% of the variation in inventory level and shows that inventory level is positively associated with product variety.
Open Access
Inventory performance with pooling: evidence from mergers and acquisitions
(Elsevier, 2015) Çömez-Dolgan, N.; Tanyeri B.
Theoretical studies show that compared to decentralized inventory management, (i) pooling inventories for different demand sources decreases the optimal safety stock, which in turn decreases inventory costs and (ii) the decrease in stock is related to the correlation between the different demand sources and variabilities of demands. Mergers and acquisitions (M&A) provide a business context to investigate the effects of correlation and variability of the merging firms' demands on potential improvements in inventory performance through inventory pooling. While merging firms may not fully centralize their inventory decisions, the coordination of inventory and supply chain decisions may result in synergies. Using firm-level data for 270 same-industry mergers carried out in U.S. between 1981 and 2009, we find that the inventory turnover of bidder and target firms improves (relative to firms in their industry) following the successful completion of mergers. The improvement in turnover is especially pronounced in deals where the demand of bidder and target firms are negatively correlated prior to the merger. Our results provide novel empirical support for the predictions of theoretical models on inventory economies in M&A.
Open Access
Sales forecast inaccuracy and inventory turnover performance : an empirical analysis of US retail sector
(2010) Hançerlioğulları, Gülşah
We develop an empirical model to investigate the impact of various financial measures on inventory turnover performance. In particular, we used inaccuracy of quarterly sales forecasts as a proxy for demand uncertainty and study its impact on firm level inventory turnover ratios. The model is implemented on a sample financial data for 304 publicly listed U.S. retail firms for the 25-year period 1985-2009. Controlling for the effects of retail sub-segments and year, it is found that inventory turnover is negatively correlated with mean absolute percentage error in sales forecast and gross margin, and positively correlated with capital intensity and sales surprise. In addition to providing managerial insights regarding the determinants of a major operational performance metric, our results can also be used to benchmark a retailer’s inventory performance against its competitors.