The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
An Econometric Analysis of Inventory Turnover Performance in Retail Services
Abstract
Inventory turnover varies widely across retailers and over time. This variation undermines the usefulness of inventory turnover in performance analysis, benchmarking, and working capital management. We develop an empirical model using financial data for 311 publicly listed retail firms for the years 1987–2000 to investigate the correlation of inventory turnover with gross margin, capital intensity, and sales surprise (the ratio of actual sales to expected sales for the year). The model explains 66.7% of the within-firm variation and 97.2% of the total variation (across and within firms) in inventory turnover. It yields an alternative metric of inventory productivity, adjusted inventory turnover, which empirically adjusts inventory turnover for changes in gross margin, capital intensity, and sales surprise, and can be applied in performance analysis and managerial decision making. We also compute time trends in inventory turnover and adjusted inventory turnover, and find that both have declined in retailing during the 1987–2000 period.
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In the citing paper
“Overstocking can increase storage, obsolescence, and opportunity expenses, which can hurt a company's profitability (Gaur et al., 2005).”
From Inventory Management and Financial Performance of Listed Manufacturing Firms in Nigeria (2024) · cites this paper as Gaur et al., 2005
In the citing paper
“A lengthy inventory conversion period may imply ineffective inventory management, which keeps items idle, wasting money and perhaps causing obsolescence or spoilage.ROA might decline due to asset utilisation and profitability issues (Koumanakos, 2008;Gaur et al., 2005).”
From Inventory Management and Financial Performance of Listed Manufacturing Firms in Nigeria (2024) · cites this paper as Gaur et al., 2005
In the citing paper
“retail firms can benefit from high inventory turnover”
From Working capital management, COVID-19, and profitability of UK retail firms (2025) · cites this paper as Gaur et al. (2005)
Citations
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Cited by
Sorted by citations
Lean, leaner, too lean? The inventory–performance link revisited
Eroglu, C., & Hofer, C. (2011) · Journal of Operations Management · doi:10.1016/j.jom.2010.05.002 · Cited by 440
“Prior research has often relied on metrics such as inventory turnover (Schonberger, 2007; Gaur et al., 2005) and average inventory levels (King and Lenox, 2001) to gauge inventory leanness.”
MethodKouvelis, P., Chambers, C., & Wang, H.-Y. (2006) · doi:10.1111/j.1937-5956.2006.tb00257.x · Cited by 408
“Pioneering work on explaining the wide variations in inventory turnover performance, and the link between operational and financial performance in retail operations has recently appeared in Gaur, Fisher, and Raman (2005).”
BackgroundIn Search of the Bullwhip Effect
Cachon, G. P., Randall, T. R., & Schmidt, G. M. (2007) · Manufacturing & Service Operations Management · doi:10.1287/msom.1060.0149 · Cited by 392
“In the spirit of Gaur et al. (2005a) , weestimatethefollowing alternative specification to test if our results are induced by our specification of the variables:”
BackgroundMethodInformation Transmission and the Bullwhip Effect: An Empirical Investigation
Bray, R., & Mendelson, H. (2012) · Management Sciences · doi:10.1287/mnsc.1110.1467 · Cited by 329
“…average three-month commercial paper interest rate, aggregate sales and production of the firm's two-digit SIC, and the change in firm store counts, if it is a retailer (see Gaur et al. 2005); and specification 3 includes these variables and extends the number of lagged demands and orders to eight.”
Feng, M., Li, C., McVay, S. E., & Skaife, H. A. (2014) · The Accounting Review · doi:10.2308/accr-50909 · Cited by 374
“Turning to the factors posited to be related to inventory turnover, we find that GrossMargin is negatively associated with InventoryTurnover, consistent with the strategic association of high margins and low inventory turnover, and vice versa (Nissim and Penman 2001; Gaur et al. 2005).”
BackgroundResultInfluential
Metadata
- Authors
- Gaur, V., Fisher, M. L., & Raman, A.
- Affiliations
- New York University (US)
- University of Pennsylvania (US)
- Harvard University (US)
- Venue
- Management Science
- Published
- 2005-02
- Volume
- 51
- Issue
- 2
- Pages
- 181-194
- ISSN
- 0025-1909 (ISSN-L)
- 1526-5501
- OpenAlex
- W2130158558
- Cited by
- 469
- References
- 0
- Citations by year
- 2026: 33 · 2025: 39 · 2024: 32 · 2023: 35 · 2022: 19 · 2021: 19 · 2020: 28 · 2019: 24 · 2018: 15 · 2017: 17 · 2016: 24 · 2015: 28 · 2014: 22 · 2013: 31 · 2012: 25
- FWCI
- 48.66
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Management Science (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
- Social Sciences › Decision Sciences › Management Science and Operations Research › Supply Chain and Inventory Management
- Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
- Keywords
- inventory turnover, retail trade, gross margin, capital intensity, working capital management, performance benchmarking
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