Inventory Performance of U.S. Retail, Wholesale, and Manufacturing Companies from 1981 to 2003

Presented by Hong Chen Professor and Chair of Operations and Logistics, Sauder School of Business, University of British ColumbiaIn this talk, we examine the inventories of publicly traded American retail, wholesale and manufacturing companies between 1981 and 2003. The median of manufacturing inventory holdings was reduced from 96 days to 81 days. The greatest reduction was found for work-in-process inventory while finished-goods inventory did not decline. The median of wholesale inventory holding periods was reduced from 72 days to 52 days, while retail inventory did not start to decline until about 1995. Firms with abnormally high inventories have abnormally poor long term stock returns. Both manufacturers and wholesalers with medium-to-low inventory tend to have good stock return, but firms with the lowest inventories have only average returns. Retailers with very lower inventory tend to have good stock returns. Hong Chen first joined UBC in 1989, and is currently a professor and chair of operations and logistics at Sauder School of Business at the University of British Columbia. During 2003-2005, Hong Chen was one of the founding faculty members and academic associate dean at Cheung Kong Graduate School of Business, which is funded by Li Ka Shing Foundation and the only private business school in China. He received his B.S. degree in Mathematics from Xi'an Jiaotong University in 1982, and received his M.S. degree in 1983 and Ph.D. degree in 1987, both in Engineering-Economic Systems from Stanford University. He was Postdoctoral Fellow at Harvard University during 1987-1988. Chen's research interests are primarily in operations research, operations management, supply chain management, and the analysis, design and control of stochastic systems such as manufacturing systems, service systems, and economic and financial systems. He has published over 40 refereed papers. He is a member of INFORMS, MSOM Society and Applied Probability Society. He was the president for INFORMS Society on Applied Probability (1995/96). In the last few years, he has developed more than ten teaching cases on the supply chain management in China, and has taught at several EMBA and EDP programs in China. 10/20/2006, Hoffman Hall 306, 10:30-12:00

Location: H. Leslie Hoffman Hall Of Business Administration (HOH) - 306

Audiences: Everyone Is Invited

Contact: Georgia Lum