Abstract
This research explores the relationship that exists between inventory control and the use of technology. A survey was conducted in the city of Guadalajara, Mexico, covering 466 micro-companies. A logit analysis was used to calculate the probability for the micro-companies to implement formal inventory controls. The study found that using technology in micro-companies fosters formal inventory control. This chapter contributes to other management control studies which claim that technology might foster the use of formal inventory controls. Furthermore, this chapter aims to advise practitioners to adopt technology in their business as a way to facilitate the implementation of formal inventory controls.
TopLiterature Review
Micro companies are defined as organizations with no more than ten employees and with an annual income that does not surpass 50,000 USD (Pavon, 2010). Also, micro-companies are generally family firms (Fernandez and Nieto, 2005) and are controlled by an individual or a group of people who own the firm. Furthermore, micro-companies attend a regional market (Nikunen et al., 2017). Micro companies usually only sell to a local market as they are not aiming to achieve geographical expansion. Another vital characteristic of micro-companies is that they usually started business informally without an organizational or managerial structure (Duong, 2013).
Key Terms in this Chapter
Micro-Company: They are the smallest companies in the market whose limits on the number of employees and turnover vary between countries.
Policymaker: A member of a government department who is responsible for making new rules to rule firms and society from the public sector.
ERP: Acronym of Enterprise Resource Planning is a type of software used to manage day-to-day business activities.
Logit: It is a type of regression used for modeling a categorical outcome variable.
Technology: The practical application of knowledge to benefit society and firms.
Inventory Control: Also known as ‘Stock Control,’ it consists of how firms regulate and maximize the company’s warehouse inventory.
Dummy: A type of a dichotomous and quantitative variable that can take on any of two quantitative values.
Retailer: It is a type of intermediary between the wholesaler and the final consumer.