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The Significance of Stock Management to Jet Fuel Supply using Partial Least Squares

Author

Listed:
  • Aderibigbe Israel Adekitan

    (Department of Electrical and Information Engineering, Covenant University, Ota, Ogun State, Nigeria,)

  • Odunayo Salau

    (Department of Business Management, Covenant University, Ota, Ogun State, Nigeria.)

Abstract

Operational and commercial efficiency at a jet fuel depot are vital indices for a jet fuel marketer toward ensuring maximum business productivity. In Nigeria, jet A-1 aviation fuel scarcity is a yearly challenge that periodically triggers jet fuel price increase, air fare price hike and flight cancellation. The causes of the scarcity have been ascribed to the challenges facing jet fuel supply process. In this study, the significance of each of the seven jet fuel depots of a fuel marketer to the overall business performance is analysed using structural equation modelling to evaluate the historical sales and stock data. Historical stock data contain hidden patterns and knowledge that can be acquired and applied in operational decision making processes. The effect of each depot on business performance is classified using the significance and path coefficient result obtained from the partial least squares model implemented on historical stock data. The analysis reveals the significance of adequate stock level via supply chain management, and this creates an opportunity for directing management policies and decisions at less significant depots based on the data-mined knowledge acquired. An overall model R2 value of 0.902 was achieved. This study emphasises the relevance of quality data even in the aviation fuel industry.

Suggested Citation

  • Aderibigbe Israel Adekitan & Odunayo Salau, 2020. "The Significance of Stock Management to Jet Fuel Supply using Partial Least Squares," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 389-395.
    • Handle: RePEc:eco:journ2:2020-03-49
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    References listed on IDEAS

    as
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    2. Eduardo S. Ayra & David Ríos Insua & Javier Cano, 2014. "To Fuel or Not to Fuel? Is that the Question?," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 109(506), pages 465-476, June.
    3. Bernroider, Edward W.N. & Schmöllerl, Patrick, 2013. "A technological, organisational, and environmental analysis of decision making methodologies and satisfaction in the context of IT induced business transformations," European Journal of Operational Research, Elsevier, vol. 224(1), pages 141-153.
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    More about this item

    Keywords

    Business performance analysis; supply chain management; partial least squares; fuel scarcity; jet A-1 aviation fuel; data pattern recognition;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • N77 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Africa; Oceania
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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