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The Empirical Determinants of Inventory Levels in High‐volume Manufacturing

Year: 1999

Type: article

Abstract: This study uses survey data on several hundred automotive suppliers in North America to evaluate the determinants of inventory levels in high‐volume discrete parts manufacturing. We assess the magnitude of raw materials, work‐in‐process, and finished goods inventories held at automotive supply plants. Inventories are shown to be jointly determined by technological and managerial factors in a manner roughly consistent with classical inventory theory. Several categories of managerial practices are found to be important. Low inventories are linked to employee problem solving and frequent communication with customers. More unexpectedly, we find the absence of inventory differences between U.S.‐owned and Japanese‐owned plants in North America. This contrasts with substantial differences in inventory holding between US plants and those in Japan.

Source: Production and Operations Management

DOI: 10.1111/j.1937-5956.1999.tb00060.x

Authors: Marvin B. Lieberman, Susan Helper, Lieven Demeester

Institutions: University of California, Los Angeles, Case Western Reserve University

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2064043329

FWCI: 4.011

Cites: 15

Cited by: 91

Related to: 10