7,046
Views
2
CrossRef citations to date
0
Altmetric
Research Article

Measuring inventory turnover efficiency using stochastic frontier analysis: building materials and hardware retail chains in Norway

ORCID Icon, ORCID Icon, &
Article: 1964635 | Received 05 Feb 2021, Accepted 02 Aug 2021, Published online: 26 Aug 2021

References

  • Statistics Norway. (1999). Regionale inndelinger - En oversikt over standarder i norsk offisiell statistikk (Regional classifications - An overview of standards in Norwegian official statistics). https://www.ssb.no/a/publikasjoner/pdf/nos_c513/nos_c513.pdf.
  • Statistics Norway. (2008). Norwegian Standard Industrial Classification (SIC2007). https://www.ssb.no/a/publikasjoner/pdf/nos_d383/nos_d383.pdf.
  • Byggeindustrien. (2018). Solid vekst for byggevaremarkedet (Solid growth for the building materials market), Bygg.no. Retrieved September 17, 2018, from http://www.bygg.no/article/1345914.
  • Statistics Norway. (2018). Population and population changes. Statistics Norway. https://www.ssb.no/en/befolkning/statistikker/folkemengde/aar-per-1-januar.
  • CIA. (2020). The world factbook, central intellligence agency. Retrieved December 3, 2020, from https://www.cia.gov/library/publications/the-world-factbook/geos/no.html.
  • R Core Team. (2020). R: A language and environment for statistical computing. R Foundation for Statistical Computing. URL https://www.R-project.org/.
  • Aiello, F., & Bonanno, G. (2016). Bank efficiency and local market conditions: Evidence from Italy. Journal of Economics and Business, 83, 70–90. https://doi.org/10.1016/j.jeconbus.2015.09.002
  • Aigner, D., Lovell, C. A. K., & Schmidt, P. (1977). Formulation and estimation of stochastic frontier production function models. Journal of Econometrics, 6(1), 21–37. https://doi.org/10.1016/0304-4076(77)90052-5
  • Alan, Y., Gao, G. P., & Gaur, V. (2014). Does inventory productivity predict future stock returns? A retailing industry perspective. Management Science, 60(10), 2416–2434. https://doi.org/10.1287/mnsc.2014.1897
  • Assaf, A. G., Barros, C., & Sellers-Rubio, R. (2011). Efficiency determinants in retail stores: A Bayesian framework. Omega, 39(3), 283–292. https://doi.org/10.1016/j.omega.2010.07.005
  • Azzi, A., Battini, D., Faccio, M., Persona, A., & Sgarbossa, F. (2014). Inventory holding costs measurement: A multi-case study. The International Journal of Logistics Management, 25(1), 109–132. https://doi.org/10.1108/IJLM-01-2012-0004
  • Baker, P. (2007). An exploratory framework of the role of inventory and warehousing in international supply chains. The International Journal of Logistics Management, 18(1), 64–80. https://doi.org/10.1108/09574090710748171
  • Ballou, R. H. (2005). Expressing inventory control policy in the turnover curve. Journal of Business Logistics, 26(2), 143–164. https://doi.org/10.1002/j.2158-1592.2005.tb00209.x
  • Baltas, G. (2005). Exploring consumer differences in food demand: A stochastic frontier approach. British Food Journal, 107(9), 685–692. https://doi.org/10.1108/00070700510615062
  • Battese, G. E., & Coelli, T. J. (1995). A model for technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics, 20(2), 325–332. https://doi.org/10.1007/BF01205442
  • Ben-daya, A. M., & Raouf, A. (1994). Inventory models involving lead time as a decision variable. The Journal of the Operational Research Society, 45(5), 579–582. https://doi.org/10.1057/jors.1994.85
  • Bos, J. W. B., and Kool, C. J. M. (2006). Bank efficiency: The role of bank strategy and local market conditions. Journal of Banking and Finance, 30(7), 1953–1974. https://doi.org/10.1016/j.jbankfin.2005.07.008
  • Breivik, J. (2019). Retail chain affiliation and time trend effects on inventory turnover in Norwegian SMEs. Cogent Business and Management, 6(1), 1–17. https://doi.org/10.1080/23311975.2019.1604932
  • Cannon, A. R. (2008). Inventory improvement and financial performance. International Journal of Production Economics, 115(2), 581–593. https://doi.org/10.1016/j.ijpe.2008.07.006
  • Capkun, V., Hameri, A., & Weiss, L. (2009). On the relationship between inventory and financial performance in manufacturing companies. International Journal of Operations & Production Management, 29(8), 789–806. https://doi.org/10.1108/01443570910977698
  • Carlino, G. A., & Voith, R. (1992). Accounting for differences in aggregate state productivity. Regional Science and Urban Economics, 22(4), 597–617. https://doi.org/10.1016/0166-0462(92)90004-K
  • Chen, H., Frank, M. Z., & Wu, O. Q. (2007). U.S. retail and wholesale inventory performance from 1981 to 2004. Manufacturing & Service Operations Management, 9(4), 430–456. https://doi.org/10.1287/msom.1060.0129
  • Ciccone, A., & Hall, R. E. (1996). Productivity and the density of Economic activity. American Economic Review, 86(1), 54–70. https://doi.org/10.2307/2118255
  • Coelli, T., & Henningsen, A. (2017). Frontier: Stochastic frontier analysis. https://CRAN.R-Project.org/package=frontier.
  • DeHoratius, N., & Raman, A. (2008). Inventory record inaccuracy: An empirical analysis. Management Science, 54(4), 627–641. https://doi.org/10.1287/mnsc.1070.0789
  • Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A decision tree approach. Expert Systems with Applications, 40(10), 3970–3983. https://doi.org/10.1016/j.eswa.2013.01.012
  • Diaz, M. A., & Sanchez, R. (2008). Firm size and productivity in Spain: A stochastic frontier analysis. Small Business Economics, 30(3), 315–323. https://doi.org/10.1007/s11187-007-9058-x
  • Dinlersoz, E. M. (2004). Firm organization and the structure of retail markets. Journal of Economics & Management Strategy, 13(2), 207–240. https://doi.org/10.1111/j.1530-9134.2004.00009.x
  • Doms, M. E., Jarmin, R. S., & Klimek, S. D. (2004). Information technology investment and firm performance in US retail trade. Economics of Innovation and New Technology, 13(7), 595–613. https://doi.org/10.1080/1043859042000201911
  • Eroglu, C., & Hofer, C. (2011a). Lean, leaner, too lean? The inventory-performance link revisited. Journal of Operations Management, 29(4), 356–369. https://doi.org/10.1016/j.jom.2010.05.002
  • Eroglu, C., & Hofer, C. (2011b). Inventory types and firm performance: Vector autoregressive and vector error correction models. Journal of Business Logistics, 32(3), 227–239. https://doi.org/10.1111/j.2158-1592.2011.01019.x
  • Eroglu, C., & Hofer, C. (2014). The effect of environmental dynamism on returns to inventory leanness. Journal of Operations Management, 32(6), 347–356. https://doi.org/10.1016/j.jom.2014.06.006
  • Foster, L., Haltiwanger, J., & Krizan, C. J. (2006). Market selection, reallocation, and restructuring in the U.S. Retail trade sector in the 1990S. Review of Economics and Statistics, 88(4), 748–758. https://doi.org/10.1162/rest.88.4.748
  • Gaur, V., Fisher, M. L., & Raman, A. (2005). An econometric analysis of inventory turnover performance in retail services. Management Science, 51(2), 181–194. https://doi.org/10.1287/mnsc.1040.0298
  • Gaur, V., & Kesavan, S. (2009). The effects of firm size and sales growth rate on inventory turnover performance in the U.S. Retail sector. International Series in Operations Research and Management Science, 122, 25–52. https://doi.org/10.1007/978-0-387-78902-6_3
  • Harris, F. (1990). How many parts to make at once. Operations Research38(6), 947–950. https://doi.org/10.1287/opre.38.6.947. [Reprinted from Factory: The Magazine of Management 10(2), 1913, pp. 135–136].
  • Hernant, M., Andersson, T., & Hilmola, O. P. (2007). Managing retail chain profitability based on local competitive conditions: Preliminary analysis. International Journal of Retail and Distribution Management, 35(11), 912–935. https://doi.org/10.1108/09590550710828236
  • Hill, R. C., Griffiths, W. E., & Lim, G. C. (2011) Principles of econometrics. 4th ed. John Wiley & Sons Ltd.
  • Isaksson, O. H. D., & Seifert, R. W. (2014). Inventory leanness and the financial performance of firms. Production Planning and Control, 25(12), 999–1014. https://doi.org/10.1080/09537287.2013.797123
  • Jarmin, R. S., Klimek, S. D., & Miranda, J. (2009). The role of retail chains: National, regional and industry results. In T. Dunne, J. B. Jensen, & M. J. Roberts (Eds.), Producer dynamics: New evidence from micro data (pp. 237–262). University of Chicago Press. http://www.nber.org/chapters/c0487.
  • Kesavan, S., Kushwaha, T., & Gaur, V. (2016). Do high and low inventory turnover retailers respond differently to demand shocks? Manufacturing & Service Operations Management, 18(02), 198–215. https://doi.org/10.1287/msom.2015.0571
  • Ko, K., Chang, M., Bae, E. S., & Kim, D. (2017). Efficiency analysis of retail chain stores in korea. Sustainability, 9(9), 1–14. https://doi.org/10.3390/su9091629
  • Kolias, G. D., Dimelis, S. P., & Filios, V. P. (2011). An empirical analysis of inventory turnover behaviour in Greek retail sector: 2000-2005. International Journal of Production Economics, 133(1), 143–153. https://doi.org/10.1016/j.ijpe.2010.04.026
  • Kosová, R., & Lafontaine, F. (2012). Much ado about chains: A research agenda. International Journal of Industrial Organization, 30(3), 303–308. https://doi.org/10.1016/j.ijindorg.2011.12.010
  • Kumar, V., & Karande, K. (2000). The effect of retail store environment on retailer performance. Journal of Business Research, 49(2), 167–181. https://doi.org/10.1016/S0148-2963(99)00005-3
  • Kumbhakar, S. C., & Lovell, C. A. K. (2000). Stochastic frontier analysis. Cambridge University Press.
  • Meeusen, W., & van Den Broeck, J. (1977). Efficiency estimation from cobb-douglas Production functions with composed error. International Economic Review, 18(2), 435. https://doi.org/10.2307/2525757
  • Monahan, S., Ward, J., Zimmerman, M., Sonthalia, B., & Vanhencxthoven, M. (2017). Accelerating into uncertainty. CSCMP’s Annual state of logistics report, pp. 1–46.
  • Moser, P., Isaksson, O. H. D., & Seifert, R. W. (2017). Inventory dynamics in process industries: An empirical investigation. International Journal of Production Economics, 191(January), 253–266. https://doi.org/10.1016/j.ijpe.2017.06.019
  • Otsuka, A. (2017). Regional determinants of total factor productivity in Japan: Stochastic frontier analysis. The Annals of Regional Science, 58(3), 579–596. https://doi.org/10.1007/s00168-017-0808-7
  • Perrigot, R. (2006). Services vs retail chains: Are there any differences? Evidence from the French franchising industry. International Journal of Retail and Distribution Management, 34(12), 918–930. https://doi.org/10.1108/09590550610714648
  • Rajagopalan, S., & Malhotra, A. (2001). Have U.S. Manufacturing inventories really decreased? An empirical study. Manufacturing & Service Operations Management, 3(1), 14–24. https://doi.org/10.1287/msom.3.1.14.9995
  • Rumyantsev, S., & Netessine, S. (2007b). Inventory and its relationship with profitability: Evidence for an international sample of countries. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2319862
  • Rumyantsev, S., & Netessine, S. (2007a). What can be learned from classical inventory models? A cross-industry exploratory investigation. Manufacturing & Service Operations Management, 9(4), 409–429. https://doi.org/10.1287/msom.1070.0166
  • Rumyantsev, S., & Netessine, S.. (2007c). Should inventory policy be lean or responsive? Evidence for US public companies. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2319834
  • Salam, A., Panahifar, F., & Byrne, P. J. (2016). Retail supply chain service levels: The role of inventory storage. Journal of Enterprise Information Management, 29(6), 887–902. https://doi.org/10.1108/JEIM-01-2015-0008
  • Shockley, J., & Turner, T. (2015). Linking inventory efficiency, productivity and responsiveness to retail firm outperformance: Empirical insights from US retailing segments. Production Planning and Control, 26(5), 393–406. https://doi.org/10.1080/09537287.2014.906680
  • Weill, L. (2008). Leverage and corporate performance: Does institutional environment matter? Small Business Economics, 30(3), 251–265. https://doi.org/10.1007/s11187-006-9045-7
  • Williams, B. D., & Tokar, T. (2008). A review of inventory management research in major logistics journals: Themes and future directions. The International Journal of Logistics Management, 19(2), 212–232. https://doi.org/10.1108/09574090810895960
  • Yao, A. C., & Carlson, J. G. (1999). Impact of real-time data communication on inventory management. International Journal of Production Economics, 59(1), 213–219. https://doi.org/10.1016/S0925-5273(98)00234-5