An Empirical Study Of Inventory Management In Domestic Home Appliance Industry

Manufacturing plays particularly important roles in our current economy·Market competition environment has undergone tremendous changes along with the advent of economic globalization and knowledge-based economy era. Enterprises are required to improve the controllable degree of market resources by the increase of users'demand uncertainty and personalization, the shortening of product lifecycle and increasingly complex Product, and so on. Inventory has become bottleneck in many manufacturing enterprises, so researching on the problems of inventory management has important significances.The inventory cost is the important part of the whole operation cost of a company. How to reduce the inventory but preserve the operation now is the critical point of business management. The home appliance industry is playing an important role in national economy development. Therefore, the inventory management is the critical point to the business development in home appliance industry. This paper investigates Inventory Turnover and Inventory Productivity of using financial data for 23 firms for the years 1998~2006 in china. We found that the total inventory was occupied the big part the case flow. Inventory Turnover was related with Sales Ratio. The Sales Ratio is more sensitive to Inventory Turnover when less than 1. Inventory Turnover had positive relation with Capital Intensity. Inventory Turnover was increased in material and in-process goods between 1998 and 2006 except finished goods. The average Turnover of Inventory was positively related with the ROIC in material and in-process inventory, the higher and lower turnover of inventory did not increase the profit. In finished goods inventory, none of Inventory Turnover affected the ROIC. The Macro-Economic factors did not affect Inventory Turnover. And the last, we found the Gross Margin was not related to Inventory Turnover.