Comparative study of the use of just in time method versus perpetual method on each division's performance at toubitex company

مقدم أطروحة جامعية

al-Yaqubi, Zaynab

مشرف أطروحة جامعية

Bouras, A.

الجامعة

جامعة الأخوين

الكلية

كلية إدارة الأعمال

دولة الجامعة

المغرب

الدرجة العلمية

ماجستير

تاريخ الدرجة العلمية

2004

الملخص الإنجليزي

The textile sector plays an important role in the Moroccan economy.

It has 39% of the Moroccan market share.

It accounts for 35% of exports and 18% of the national investments.

Toubitex is a company that is producing clothes.

It has two divisions, the domestic division produces clothes for the national market and it uses the perpetual inventory management system and the export division manufactures clothes for the international market mainly the European one and uses Just in Time method.

The export division does not produce goods until it receives orders from customers.

When an order is received, the division has its reliable suppliers that deliver to it good raw materials on time.

Later, the division starts production in order to be able to deUver finished items on time to final customers.

However, when an order is received by the domestic division, it has already goods stocked in its warehouse.

In this project, I compare the supply chain for the two divisions in terms of suppliers, production process, distribution, and the market.

Later, I forecast the sales of the two divisions in order to see the sales evolution.

Finally, I compute five ratios, three are related to the efficient use of assets, which are the asset turnover ratio, the inventory turnover ratio, and the net working capital to total assets ratio and the other two are related to profitability, which are the return on assets ratio and the net profit margin ratio.

These ratios are computed for the two divisions during four years, 2000, 2001, 2002, and 2003, in order to see the evolution of each ratio.

The ratios are computed in order to see if the use of a specific method, JIT or perpetual method, affects these ratios.

The aim behind this research is to see the impact of using the pull system (JIT method) and push system (traditional perpetual method) on firms’ profitabihty and efficiency in terms of the efficient use of assets.

Concerning the supply chain, the results of this study shows that the export division relies on few but reliable supphers, with whom it has contracts and avoids inventory maintaining expenses.

However, the domestic division has large number of suppUers but it does not have contracts with them and it has to pay for the expenses related to inventory maintaining.

There are many studies that were done in order to examine the impact of JIT use on firms’ performance by measuring the return on asset (ROA) ratio, the profit margin (PM), and the asset turnover ratio.

However, it is still seen as a complex problem.

Many researchers affirmed the positive effects of JIT method on firms’ performance in terms of profitability and efficient use of assets.

However, others found that JIT use does not affect companies’ performance.

For instance, Balakrishnan, et al.

(1996) used a sample of 46 JIT users and matched non-users but his sample included a greater portion of small firms.

They concluded that JIT adopters were able to enhance their inventory turnover ratio compared to non-JIT users.

Though, they did not find that JIT implementation is associated with improvement in return on assets ratio.^ Moreover, Just in Time method is not well known within the Moroccan companies compared to other countries such as Japan and the United States.

Since inventory management is one way that leads to companies’ success, I want to examine if the application of JIT method is more efficient in terms of efficient use of assets and profitability than the traditional perpetual inventory system.

The profitability is measured by computing the return on assets ratio (ROA) since firm’s performance can be measured by the ratio of net income to average total assets and the profit margin ratio (PM) that shows the percentage of sales that the firm has as profit after paying all expenses.

The efficient use of assets is measured by asset turnover ratio that measures the revenue generated per 1 dirham invested in assets for the two divisions, the inventory turnover ratio that measures the rate at which the company is turning over its inventories, and the net working capital to total assets ratio that is a measure of liquidity but liquidity is dependent on the use of assets that include inventory.Concerning the forecast, the forecasted sales of the export division are tended to increase continuously.

However, the forecasted sales of the domestic division are decreasing rapidly.

Regarding the ratios, the export division has higher asset turnover ratio, higher net working capital to total assets ratio, higher return on assets ratio, and higher net profit margin than the domestic division for the four years.

This means that the main hypothesis, which is Ho : The use of JIT method contributes to more efficient use of assets and profitability than the perpetual inventory management method.

التخصصات الرئيسية

إدارة الأعمال

عدد الصفحات

115

قائمة المحتويات

• APA
• MLA
• AMA

لغة النص

الإنجليزية

نوع البيانات

رسائل جامعية

رقم السجل

BIM-627683