Stock Levels in Relation to the Competitiveness of the Company

Tímea Kozma; Rita Szabó-Geletóczki; Endre Szabó; Kornelia Osieczko-Potoczna; Attila Kurucz

doi:10.14513/tge-jres.00617

Authors

Tímea Kozma Budapest University of Economics and Business, Faculty of Management, Process Management Department, H1149 Budapest, Buzogány utca 10-12., Hungary Author https://orcid.org/0000-0002-6164-8922
Rita Szabó-Geletóczki Budapest University of Economics and Business, Faculty of Management, Process Management Department, H1149 Budapest, Buzogány utca 10-12., Hungary Author https://orcid.org/0009-0007-8878-4629
Endre Szabó Hungarian Agricultural and Life Sciences University, Doctoral School of Economic and Regional Sciences, Kaposvár, H7400, Guba Sándor street 40, Hungary Author https://orcid.org/0009-0006-9833-1618
Kornelia Osieczko-Potoczna Rzeszów University of Technology, Faculty of Management, Department of Management Systems and Logistics, 35‑029 Rzeszów, al. Powstańców Warszawy 12, Poland Author https://orcid.org/0000-0001-5014-2742
Attila Kurucz Széchenyi István University, Kautz Gyula Faculty of Business and Economics, Department of Corporate Leadership and Marketing, Győr, H9026 Egyetem square 1. Hungary Author https://orcid.org/0000-0003-3122-8174

DOI:

https://doi.org/10.14513/tge-jres.00617

Keywords:

corporate decision-making, cost control, corporate competitiveness, inventory level optimization, inventory management

Abstract

Purpose – The objective of this study is to explore the contribution of inventory management and levels in manufacturing and industrial companies to the competitiveness of the company in an uncertain macroeconomic environment, such as during times of crisis. The objective of the research is to ascertain the impact of consciously devised inventory strategies on cost efficiency, the amount of tied-up capital, and customer service levels, and, consequently, corporate performance.

Design/methodology/approach – The study's methodology is based on a combination of primary and secondary research methods. The present study focuses on the period of crisis, which is defined as 2020-2022. The present study draws upon empirical data (i.e. inventory levels, turnover, orders, and average price) from a global market-leading manufacturing company in order to apply a range of inventory analysis techniques. Such techniques include ABC and XYZ analysis, as well as inventory turnover rate and inventory efficiency indicators. The objective of the analyses is to explore the relationships between inventory levels and the efficiency of company operations, supplemented by a synthesis of the relevant literature.

Findings The findings indicate that an inventory strategy not devised with due rigour can give rise to excessively high inventory levels and consequent immobilisation of capital, whilst offering no assurance of enhancement in customer service. The integrated application of ABC and XYZ analysis methodologies facilitates targeted inventory management, thereby reducing inventory carrying costs and enhancing inventory turnover.

Originality – The originality of the study lies in its interpretation of inventory management within the context of corporate competitiveness, thereby exceeding the conventional operational approach. The research is based on an empirical analysis of the total inventory of a global manufacturing company, which examines the economic implications of inventory decisions in a data-rich manner. A novel contribution is the integrated and critical application of ABC and XYZ analysis methods, which provides an opportunity to reinterpret corporate inventory practices. The study thus reinforces the strategic approach to inventory management on an empirical basis.

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