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Research on Customer Geographic Proximity and Inventory Management—Empirical Evidence from Chinese Manufacturing Listed Companies

DOI: 10.4236/ajibm.2019.91001, PP. 1-10

Keywords: Geographic Proximity, Inventory Management Efficiency, Supply chain

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Abstract:

Using the hand collected data of the top five clients of manufacturing enterprises in China, this paper examines the effect of customer geographic proximity on the inventory management level of manufacturing enterprises. The results show that there is a positive relation between the geographic proximity and inventory management level: the greater the geography proximity of customers, the lower the proportion of inventory, the higher the inventory turnover rate. This paper not only contributes to the literature on the factors affecting the level of inventory management and the supply chain management, but also provides reference on how the manufacturing enterprises can maintain the relationship with customers better, and improve inventory management efficiency.

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