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Operating decisions, supplier availability and quality: An empirical study
Author(s) -
Kekre Sunder,
Murthi B.P.S.,
Srinivasan Kannan
Publication year - 1995
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/0272-6963(95)00002-a
Subject(s) - purchasing , product (mathematics) , quality (philosophy) , supplier relationship management , business , empirical research , competition (biology) , marketing , industrial organization , supply chain , supply chain management , operations management , economics , ecology , philosophy , geometry , mathematics , epistemology , biology
In the just‐in‐time (JIT) philosophy, purchasing strategies advocate the use of fewer sources of supply to enable a firm to improve the quality of its products. However, there is paucity of empirical evidence in support of the theory. We develop a model by integrating concepts from manufacturing, marketing, and business strategy to better understand the links between operating decisions of the firm, supplier availability, and product quality. We empirically test the hypotheses using cross‐sectional PIMS data. Our analysis shows that operating decisions and environmental factors such as wider product lines, lower levels of competition, and greater frequency of product changes increase the likelihood of a firms' reduction of supplier base, which in turn raises quality levels.