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THE RELATIONSHIP OF ELECTRONIC DATA INTERCHANGE WITH INVENTORY AND FINANCIAL RESOURCES
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2000
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Demand VolatilityBusiness IntelligenceBusiness AnalyticsE-procurementInformation Technology ManagementManagementEnterprise Information SystemFinancial AccountingQuantitative ManagementTechnology TransferAccountingSupply Chain ManagementInformation ManagementFinanceElectronic Data InterchangeTechnology ManagementBusinessFinancial PerformanceField Inventory ManagementPurchasingData Exchange
This study focused on the effects of electronic data interchange (EDI) on inventory and financial performance, while controlling for demand volatility, firm size, production technology routineness, and just-in-time (JIT). The authors examine EDI purchases and EDI sales; inbound, in-process, and outbound inventories; and ROI, ROS, and profit. The LISREL findings show that, after controlling for potential confounders, EDI is positively related to both inventory and financial performance. Subgroup analyses show that the effect of EDI on inventory is particularly strong when demand is stable, when firm size is small, when production technology is routine, and when JIT is extensively used.