| Currently, the original closed market in the past is developing towards a global open market with no borders or geographical restrictions, and such a change in the market would inevitably lead to changes of the enterprise management mode, the production and organization mode and the production technology. From the beginning of the 1970s, the Japanese manufacturing company, Just- In-Time (hereafter referred to as JIT) began to spread to other countries all over the world. Since then, the American managers have been paying much more attention to the inventory management, which leads enterprises to begin to reduce their inventory level and the capital markets to give a higher return to enterprises with lower levels of inventory (Chen,2005). Nowadays, the management ideas and models of JIM are becoming a development hotspot of the new generation of enterprises, and tend to penetrate into all aspects of the business management. In theory, inventory may affect the valuation and performance of enterprises through multiple ways. And the long-term empirical research made by domestic and foreign scholars has proven the influence of inventory on enterprise performance. Therefore, the research on enterprise inventory is of critical significance. Enterprise inventory management is closed related to the demand volume and market price of the enterprise’s products, the sound system of production and the enterprise’s overall profitability, and the advanced inventory management model is conducive to promoting enterprise inventory management efficiency, thus promoting its business performance. If the inventory management lacks efficiency, it will seriously affect the enterprise’s operating performance. At present, China’s manufacturing enterprises are facing fierce market competition and changing customer needs. In this case, the inventory management of enterprises within the industry appeared a lot of problems, including the aspects that raw materials procurement cycle is too long and inventory control are difficult. Besides, the corporate inventory costs and especially the lots of liquidity funds taken up by stock parts and semi-finished products are key factors that affect the enterprise’s development. Therefore China’s manufacturing enterprises paid more and more attention to the inventory level and inventory management, making efforts to reduce its inventory level and inventory cost.This thesis reviews studies of inventory theory, enterprise performance and the relationship between inventory and enterprise performance both at home and abroad, and then makes an empirical study to prove the relationship between the corporate inventory change tendency and the business performance taking the unbalanced panel data of 1803 Chinese listed manufacturing enterprises in 2003-2014. The results show that:there is an overall downward tendency of the inventory period of Chinese manufacturing enterprises in 2003-2014 (including the total inventory, raw materials and products), but the situation is different in various industries; GDP, CPI and other macroeconomic factors can affect the changes of inventory; and there is a non-linear inverted U-shaped relationship between the inventory management efficiency and the enterprise performance. In other words, the inventory is not the fewer the better. In addition, it has also been found that the relationship between the inventory and the enterprise performance varies from sub-sector to sub-sector. In short, there are complex linkages between a company’s stock holdings and its performance, and the study presented in this paper will make people have a better understanding of the relationship between the two and provide useful suggestions for the inventory management and performance improvement of China’s manufacturing enterprises. |
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