The Impact Of Logistics Distribution Network On Inventory Level Of Chinese Retailers

The logistic distribution network is the key to Chinese Retailers. It helps to speed up turnover rate of funds, decrease inventory cost and increase profits.This research summarizes the status of Chinese retailers' logistic distribution network. Then, we use a case study of Suning Company to calculate inventory levels under different logistic distribution networks. Through the result, we find that the national retailers using three-class logistic distribution network have lower inventory level, the retailers delivering product without considering product categories have lower inventory level, the retailers using self-operated delivery have lower inventory level, the retailers with more stores have higher inventory level.In order to test the result above, this research establishes multiple linear regression models to examine the relationship between delivery network characteristics and inventory level with data of 61 listed retail enterprises from 2011 to 2014. The results find that the inventory turnover days of the national retail enterprises are higher than that of the regional retail enterprises. Compared to the retail enterprises with other delivery mode, the inventory turnover days are lower of those with self-operated delivery mode. The chain-operated retailers have lower inventory levels. The inventory turnover days of retailers in eastern area are lower than that of retailers in western area. The number of stores, gross margin and fee rate are positive with the inventory level. Proportion of fixed assets, sales growth and ratio of accounts payable are negative with inventory level. There is no significant relationship between the cost of capital use and inventory level.At last, we offer management suggestions to Chinese retailers according to the results above. Firstly, the retailers should increase the ratio of self-operated delivery and set up logistic distribution network scientifically. Secondly, manage chain-store operation better. Thirdly, increase sales, especially the sales of single store.