Open AccessWal-Marts Dilemma In The 21st Century: Sales Growth Vs. Inventory Growth
Author(s) -
Seungjae Shin,
Jack E. Tucci
Publication year - 2014
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v31i1.8988
Subject(s) - competitor analysis , supply chain , inventory management , business , industrial organization , marketing , economics , operations management
Wal-Mart has been a leader in the retail industry since 1980s. In the 21st century, Wal-Marts RFID initiative is another innovation for Wal-Marts supply chain management. Wal-Marts recent business target in the 21Century is making a higher sales growth rate than inventory growth rate. Comparing with financial ratios of Wal-Marts competitors, Wal-Mart has significantly better ratios for days-in-inventory, inventory-sales-ratio, and cash-conversion-cycle. However, there is no significant evidence of better ratios for supply chain related profit ratio. Regression analysis reveals that while days-in-inventory has a similar effect on both sales growth rate and inventory growth rate, supply chain ratio has more effect on inventory growth rate than sales growth rate.