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Supplier-Based Concentration and Inventory Efficiency

Supplier-Based Concentration and Inventory Efficiency

Yize Hu, Jun Shan
Copyright: © 2020 |Volume: 13 |Issue: 4 |Pages: 19
ISSN: 1935-5726|EISSN: 1935-5734|EISBN13: 9781799800774|DOI: 10.4018/IJISSCM.2020100105
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MLA

Hu, Yize, and Jun Shan. "Supplier-Based Concentration and Inventory Efficiency." IJISSCM vol.13, no.4 2020: pp.95-113. http://doi.org/10.4018/IJISSCM.2020100105

APA

Hu, Y. & Shan, J. (2020). Supplier-Based Concentration and Inventory Efficiency. International Journal of Information Systems and Supply Chain Management (IJISSCM), 13(4), 95-113. http://doi.org/10.4018/IJISSCM.2020100105

Chicago

Hu, Yize, and Jun Shan. "Supplier-Based Concentration and Inventory Efficiency," International Journal of Information Systems and Supply Chain Management (IJISSCM) 13, no.4: 95-113. http://doi.org/10.4018/IJISSCM.2020100105

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Abstract

This study empirically examines the relation between supplier-base concentration and inventory efficiency in the Chinese manufacturing sector. Using hand-collected data from annual reports during 2007–2015, the authors find that manufacturers with a more concentrated supplier base hold fewer inventories, and the efficiency primarily flows through the raw materials and work-in-process inventory accounts. The authors find that small firms benefit more from a concentrated supplier base in inventory efficiency than large firms do. The authors also find that the positive effect of supplier-base concentration on inventory efficiency is stronger as customer-base concentration increases. In an additional analysis, the authors find that firms with a high supplier-base concentration would have better current and future financial performance.

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