Customer/Supplier Concentration And Inventory Management

Inventories are not only an important part of the working capital of manufacturing enterprises,but also affect the business strategy of the company.Undoubtedly,inventory is of vital importance to manufacturing enterprises.Good inventory management is to maintain good inventory and turnover rate under the premise of rationally arranging procurement,production,sales and other activities to achieve continuous production,so that inventory costs are the lowest.In modern enterprises,inventory management is not only the inventory management decision of a single enterprise,but also the inventory management decision between supply chains.The core enterprise needs to make the most reasonable inventory management decision based on the supplier's inventory decision and the downstream customer's purchase demand.Improve the level of inventory management.Based on the relevant theories of the relationship between customers/suppliers and core enterprises,this paper uses the financial data of listed companies to investigate how customers/suppliers influence the inventory management level of enterprises in the process of competition with enterprises.Empirical studies have found that there is a positive correlation between customer/supplier concentration and inventory management,Specifically,there is a significant positive relationship between customer/supplier concentration and inventory turnover,and there is a significant negative relationship between customer/supplier concentration and inventory holding ratio..In addition,the size of the enterprise,the uniqueness of the product,and the nature of the property rights will make a difference in the relationship between customer/supplier concentration and inventory management.Compared with large companies,the relationship between customer/supplier concentration and inventory management of small companies is more significant;In enterprises with strong product uniqueness,the relationship between customer/supplier concentration and inventory management is more significant;compared with state-owned enterprises,the relationship between customer/supplier concentration and inventory management is more significant in non-state-owned enterprises.At the same time,this paper also finds that this positive correlation between customer/supplier concentration and inventory management will promote the improvement of corporate performance.In order to make the research conclusion more stable,this paper chooses different measurement methods to test the relationship between customer/supplier concentration and inventory management,and the conclusion is confirmed again.Finally,combined with China's national conditions,the results of this paper are discussed and corresponding policy recommendations are put forward.