Measuring and comparing volume flexibility in the capital goods industry

• 成果类型: Article
• 署名作者: Jack, EP; Raturi, AS
• 署名单位: University of Alabama System; University of Alabama Birmingham; University System of Ohio; University of Cincinnati
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• 发表日期: 2003
• 页码: 480-501
• 关键词: volume flexibility; operations strategy; small versus large firms; secondary data; Empirical Research

摘要

This paper presents a theoretical framework for measuring volume flexibility and relating these measures to firm performance. We develop four metrics using the principle that a volume flexible firm can handle similar levels of uncertainty (as measured by sales variability) with smaller fluctuations in inputs (as measured by variability in cost of goods sold and variability in inventory levels). Then, using 20 years of Compustat data on 550 firms in the capital goods industry, we find that on three of four process-based measures, small firms are more volume flexible. However, when we incorporate financial performance into our fourth metric, we find that large firms are more volume flexible. We conclude that, to be volume flexible is one thing, but to benefit from this flexibility, firms need to focus on the cost of being flexible.