Determinants of Effective Inventory Management A Study of Consumer Durable Retailers

Global retailing is evolving into hi-tech business Indian retail market is poised to follow the path with large number of global players eyeing the market. 10.6% of growth Indian Retail market has experienced between the year 2010 and 2012. Revolution in Indian Retail has been brought about with the change in demographic profile, increase in income levels, urbanization, technology and globalization. Growth comes along with challenges, which retailers have to manage in order to sustain in the competitive environment. It is imperative for the retailers to offer adequate service levels to sustain. The determinants of service levels for a retailer can be linked to availability and variety which aspects can be maintained through a healthy inventory. The paper attempts to address the objective of identifying determinants of effective inventory management. An exploratory survey was conducted among 60 retailers from Allahabad, Lucknow, and New Delhi dealing with consumer durables. Data was treated with factor analysis and Regression analysis. Four Factors of Retailer Size, Supplier Relationship, Service Level and Demand Uncertainty emerged as the determinants of effective inventory management. Positive relationship emerged between Retailer Size, Supplier Relationship, Demand Uncertainty and Effective Inventory Management through regression analysis.