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Impact of the Operations Manager's dual role on inventory policy

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  • Tribo Gine, José Antonio
  • Alfaro, José A.

Abstract

In modern corporations, the Operations Manager’s role in defining of firm’s strategy is becoming more important. In this paper we describe how firms can use this tendency for Operations Managers to make strategic decisions as a mechanism to prevent inventory mismanagement. These managers have incentives to speculate with inventory cost reductions, thereby avoiding sharp reductions in a single period, because it would hinder further reductions in the future. Remarkably, firms may prevent such behavior by stimulating the Operations Managers’ strategic orientation, without losing sight of inventory-efficient management.

Suggested Citation

  • Tribo Gine, José Antonio & Alfaro, José A., 2007. "Impact of the Operations Manager's dual role on inventory policy," DEE - Working Papers. Business Economics. WB wb076612, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
  • Handle: RePEc:cte:wbrepe:wb076612
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    1. repec:pal:jorsoc:v:54:y:2003:i:2:d:10.1057_palgrave.jors.2601526 is not listed on IDEAS
    2. Rafael Repullo & Javier Suarez, 2004. "Venture Capital Finance: A Security Design Approach," Review of Finance, European Finance Association, vol. 8(1), pages 75-108.
    3. Donald Gerwin, 1993. "Manufacturing Flexibility: A Strategic Perspective," Management Science, INFORMS, vol. 39(4), pages 395-410, April.
    4. Matsuura, H. & Tsubone, H., 1993. "A comparison of centralized and decentralized control rules in push-type production ordering systems," European Journal of Operational Research, Elsevier, vol. 70(2), pages 199-211, October.
    5. Alan S. Blinder & Louis J. Maccini, 1991. "Taking Stock: A Critical Assessment of Recent Research on Inventories," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 73-96, Winter.
    6. Alfaro, Jose A. & Tribo, Josep A., 2003. "Operations manager turnover and inventory fluctuations," International Journal of Production Economics, Elsevier, vol. 81(1), pages 51-58, January.
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    Keywords

    Inventory policy;

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