Linking Inventory Management Performance and Operational Performance: An Empirical Analysis of U.S. Fashion Apparel and Accessory Industries

Abstract

Managing inventories is at the core of operational performance in fashion industries. Due to its importance in practice, inventory management has been a well-studied area of research in operations management. The purpose of this study is to examine the relationship between inventory management performance including inventory efficiency, productivity and responsive, and firm operational performance. We present and empirically test a performance model which integrates the various dimensions of a fashion industry’s inventory management execution. The regression analysis is used to study the effect of various measures on inventory performance. We use financial data for 40 publicly listed U.S. fashion apparel and accessory industries for the 6-year period, 2010–2015, from “Compustat North America Annually Updated” available at Standard and Poor’s Compustat database using Wharton Research Data Services (WRDS). We discuss the implications of these empirical results on the study of inventory policy execution, and propose some guidance for further research.