The Effect of Diversification Strategies on Inventory Performance

The Effect of Diversification Strategies on Inventory Performance

Blog Article

Today, with rapid and sustained changes in business markets, a growing number of companies have turned diversification into new product segments or global markets by shifting their business to increase the importance of long-term financial viability and sustainability.Moreover, increasing the variety of products, covering the uncertain demand of customers, managing inventories and timely action have been important issues in manufacturing companies.Accordingly, the main purpose of this study is click here to investigate the impact of diversification strategy on inventory performance, which is one of the topics of operations management by considering the classification of the diversity into related, unrelated and international.The statistical population studied includes all companies listed in the Tehran Stock Exchange during the years 2009-2018.Sampling has been done by screening method, and the number of companies in the final sample has reached 120 companies.

The hypotheses have been tested by the estimated generalized least squares method.The results show that related and international diversification have positive and significant effects on inventory performance.The findings also indicate that unrelated diversification has an adverse effect on inventory performance, but this relationship is not statistically significant.Based on the sten jacket m acquired results, an increase in related and international variety of products, relying on higher safety stock, has led to an increase in sales.In addition, the insignificancy in the effect of unrelated diversification on inventory performance can be attributed to production costs and marketing programs of manufactured products.