Login

Create Account
+14156709189
info@expertsmind.com
Submit Homework/Assignment
Get quote & make Payment
Get Solution
Regression, Basic Statistics
Read the article “Apple turns over entire inventory every five days.”1
It is not surprising that, the
success of managing inventory can lead to the success of a firm’s operational performance.
Although we have not talked about the inventory management models, we will first look at real
inventory data to identify some of the important factors that affect a firm’s inventory
performance.
The Excel file of Assignment 5 contains the quarterly information (Q1 to Q4) for more than 250
firms (mostly in the retailer and wholesaler industries, where inventory management is crucial to
firms’ performance) in the fiscal year of 20102
. Most of the variables are fairly straightforward,
except the following ones whose definitions are shown below:
Account Payable = can be approximated to be the trade credit owed to the
firm’s suppliers.
Inventory turnover = how fast a firm turns their inventory into sales
= (cost of goods sold)/(this period and last period’s
inventory average)
Gross Margin = (sales – cost of goods sold)/sales
Capital Intensity = (Gross fixed assets)/( Gross fixed assets + inventory)
Trade Credit Ratio = Account Payable/sales
You may use Excel and turn in the printout as well as the Excel file (by email). You still need to
answer all questions asked in the problem by writing on your printout. For the significance level,
you can test for ?=1%, 5%, and 10%, respectively.
Two inventory performance measures can be used here: the inventory level (Column H) or the
inventory turnover (Column L). First, we investigate the variables that are correlated with the
inventory level.
Hypothesis 1: The inventory level is positively correlated with the assets.
Hypothesis 2: The inventory level is positively correlated with the market value.
Hypothesis 3: The inventory level exhibits a seasonality pattern.
Hypothesis 4: The inventory level is generally higher in Q3 than Q1, Q2, and Q4, after
controlling for the firm size measured by assets.
Hypothesis 5: The inventory level is positively correlated with the natural logarithm of
(Account payable+1) after controlling for the firm size.
Hypothesis 6: The inventory level is positively correlated with Account payable after
controlling for the firm size.
1
http://appleinsider.com/articles/12/05/31/apple_turns_over_entire_inventory_every_five_days
2
See
COMPUSTAT for data source.1. Build a regression model to test Hypothesis 1. Does the data support Hypothesis 1? Explain
why.
2. Build a regression model to test Hypothesis 2. Does the data support Hypothesis 2? Explain
why.
3. Build a regression model to jointly test Hypotheses 1 and 2. Does the data support both in
this test? Explain why. Do you observe any issues?
4. Build a regression model to test Hypothesis 3. Does the data support Hypothesis 3? Explain
why.
5. Build a regression model to test Hypothesis 4. Does the data support Hypothesis 4? Explain
why. (Hint: you can “control” an independent variable simply by adding this variable into the
regression model.)
6. Build models to test Hypotheses 5 and 6. Which model is better? Why?
Next, we investigate the variables that are correlated with the inventory turnover.
Hypothesis 7: The inventory turnover is negatively correlated with the gross margin.
Hypothesis 8: The inventory turnover is positively correlated with the capital intensity.
Hypothesis 9: The inventory turnover is negatively correlated with the trade credit to
sales ratio.
7. Build a model to jointly test Hypotheses 79, with and without controlling for the firm size
measured by log(asset). Comment on the results and the insights you learn from the
regression model.
also an excel data file
Posted Date: 3/11/2013 8:14:34 AM  Location : Hong Kong
Ask an Expert
Related Discussions:
Regression, Assignment Help, Ask Question on Regression, Get Answer, Expert's Help, Regression Discussions
Write discussion on Regression
Your posts are moderated
Write your message here..
Related Questions
Kurtosis, define kurtosis with relevant examples
define kurtosis with relevant examples
Spss, SPSS Assignment 1. Execute the following functions using SP...
SPSS Assignment 1. Execute the following functions using SPSS. a) Enter the following data Case Age Weight Gender
Find the probability, Question: (a) Find the number of different words...
Question: (a) Find the number of different words which can be formed with the letters A, A, A, B, B, C, C if (i) there is no restriction (ii) they must st
Time seires, explain time series analysis
explain time series analysis
Bank Reconciliation, need to understand bank recon...
need to understand bank recon...
Managing Ashland, calculate the probabilities correct to 6 decimal places. ...
calculate the probabilities correct to 6 decimal places. Let pie = 0.02. a. P(X less than 3,
Define mortality, Define Mortality: The following rates are used for measur...
Define Mortality: The following rates are used for measuring mortality. Crude death rate The annual crude death rate is defined as Crude death rate = annual deaths / annual
Study guide, Can you provide me a study guide for accounting please? Can yo...
Can you provide me a study guide for accounting please? Can you give me picture examples & instructions on how to do things that are really easy to understand? I need this for doin
Lpp, A paper mill produces two grades of paper viz., X and Y. Because of ra...
A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i
Probability, Suppose I ask you to pick any four cards at random from a deck...
Suppose I ask you to pick any four cards at random from a deck of 52, without replacement, and bet you one dollar that at least one of the four is a face card (i.e., Jack, Queen, o
Assignment Help
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
IT Courses and Help
ExpertsMind Services
Online Tutoring
Projects Assistance
Exam Preparation
Coursework Help
Programming Courses
Engineering Courses
Why Us ?
~Experienced Tutors
~24x7 hrs Support
~Plagiarism Free
~Quality of Work
~Time on Delivery
~Privacy of Work