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Article
Publication date: 17 July 2009

Vedran Capkun, Ari‐Pekka Hameri and Lawrence A. Weiss

The purpose of this paper is to study the relationship between inventory performance, both total inventory (INV) and its discrete components (raw material (RMI), work‐in‐process…

9927

Abstract

Purpose

The purpose of this paper is to study the relationship between inventory performance, both total inventory (INV) and its discrete components (raw material (RMI), work‐in‐process (WIP), and finished goods (FGI)), and financial performance in manufacturing companies.

Design/methodology/approach

Statistical analysis is applied to the financial information of US‐based manufacturing firms over the 26‐year period from 1980 to 2005.

Findings

The paper finds a significant positive correlation between inventory performance (total as well as the discrete components of inventory) and measures of financial performance (at both the gross and operating levels) for firms in manufacturing industries. The correlation between the performance of discrete types of inventory and financial performance varies significantly across inventory types. RMI performance has the highest correlation with all financial performance measures. Between WIP inventory and FGI performance, the former is more highly correlated with gross profit measures while the latter is more highly correlated with operating profit measures.

Originality/value

This paper is the first to systematically analyze the relationship between inventory performance and financial performance for a large sample of firms across all manufacturing industries. The paper adds to prior literature by discussing and testing the relationship between both INV performance and the discrete types of inventory (RMI, WIP, and FGI) and profitability of operations, both at the gross and at the operating profit levels. The paper also analyzes the results for firms across as well as within manufacturing industries. The results obtained support the operations management literature's claim that a managerial focus on inventory performance results in value creation for manufacturing firms.

Details

International Journal of Operations & Production Management, vol. 29 no. 8
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 16 March 2012

Vedran Capkun, Martin Messner and Clemens Rissbacher

The purpose of this paper is to examine the link between service specialization and operational performance in hospitals. Existing literature has mostly been concerned with the…

2619

Abstract

Purpose

The purpose of this paper is to examine the link between service specialization and operational performance in hospitals. Existing literature has mostly been concerned with the performance effects of operational focus, which can be seen as an extreme form of specialization. It is not clear, however, whether an effect similar to the focus effect can be observed also in cases where specialization takes on less extreme forms. The authors analyze this effect up to and above the effects of volume, learning and patient selection.

Design/methodology/approach

Ordinary least squares (OLS) and two‐stage regression models were used to analyze patient data from 142 Austrian hospitals over the 2002‐2006 period. The sample contains 322,193 patient groups (841,687 patient group‐year observations).

Findings

The authors find that increased specialization in a service leads to a more efficient provision of this service in terms of shorter length of stay. The analysis shows that this effect holds even after controlling for volume, learning, and patient selection effects. The authors suggest that the pure specialization effect is due to the increased administrative and medical attention that is given to a service when the relative importance of that service increases.

Practical implications

The paper's results indicate hospital managers should pay attention to the impact of specialization when making service‐mix decisions. If two services have the same or a similar level of operational performance, then this does not mean that hospital managers should be indifferent as to the relative volume of these services.

Originality/value

The paper provides additional insights into the impact of service‐level specialization not examined in prior literature.

Details

International Journal of Operations & Production Management, vol. 32 no. 4
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 7 August 2017

Ari-Pekka Hameri and Lawrence A. Weiss

The purpose of this paper is to examine the relationship between acquisitions and inventory performance. Specifically, it analyzes the inventory performance (inventory level) of…

1093

Abstract

Purpose

The purpose of this paper is to examine the relationship between acquisitions and inventory performance. Specifically, it analyzes the inventory performance (inventory level) of acquirers and their targets pre- and post-acquisition.

Design/methodology/approach

Using several business databases, a sample of 270 horizontal acquisitions by US firms between 1996 and 2004 is subject to multivariate analysis. Various robustness tests are applied to validate the results.

Findings

Three main results are found. First, the acquirer’s inventory performance is normally better than its target’s prior to the acquisition, consistent with acquirers taking over less efficient firms rather than cherry picking the more efficient ones. Second, inventory performance improves over time in the post-acquisition period in those cases where the acquirer is more efficient than the target. Third, inventory performance deteriorates over time in the post-acquisition period in those cases where the acquirer is less efficient than the target. The results are consistent with acquisitions being associated with both efficiency gains and efficiency losses due to (in)efficiency transfers from acquirers to targets.

Practical implications

From the management point of view, the study delivers the strongest message to companies that have substantial inventories and for whom efficient inventory management is vital to overall performance. Managers who are unaware of the potential consequences of acquisitions on inventory performance destroy value.

Originality/value

This research complements past research by showing that in spite of their synergetic potential, reducing inventory receives only limited attention in acquisitions.

Details

Journal of Advances in Management Research, vol. 14 no. 3
Type: Research Article
ISSN: 0972-7981

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Article
Publication date: 11 September 2017

Frendy and HU Dan Semba

The Accounting Standards Board of Japan (ASBJ) proposed a new set of endorsed International Financial Reporting Standards in June 2015. ASBJ claims that non-recycling of other…

671

Abstract

Purpose

The Accounting Standards Board of Japan (ASBJ) proposed a new set of endorsed International Financial Reporting Standards in June 2015. ASBJ claims that non-recycling of other comprehensive income (OCI) items decreases the information usefulness of earnings in a proposed comprehensive income standard. There has been no existing empirical evidence which supports the ASBJ’s statement and the purpose of the study is to test whether OCI recycling improves information usefulness of net income from six perspectives: relative and incremental value relevance, persistence, variability, operating cash flow and net income predictive power.

Design/methodology/approach

This paper is an empirical work using a listed Japanese firms sample of 5,385 firm-years from fiscal year 2012-2014.

Findings

The results challenge the ASBJ’s claim that recycling improves the general information usefulness characteristics of net income. The empirical results show that OCI recycling improves net income’s relative value relevance characteristic of financial firms. However, recycling information by itself does not improve the incremental value relevance, and the predictive power of operating cash flow and net income. The authors also find that the inclusion of recycling decreases the persistence and increases the variability of net income.

Research limitations/implications

This paper has two research limitations. First, this study is constrained to analyze a limited OCI recycling data that is recently disclosed by listed Japanese firms. Second, the results of this study have limited external validity to capital markets with OCI reclassification standards that deviate from Japanese GAAP.

Originality/value

This study provides initial empirical evidence that examines information usefulness of OCI recycling in Japan. The findings of this study are relevant for accounting standards setters aiming to increase the information usefulness of earnings for capital market investors.

Details

Asian Review of Accounting, vol. 25 no. 3
Type: Research Article
ISSN: 1321-7348

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