Overseeing resources of assorted types can be seen as a stock issue, for the same

principles apply to money and altered resources as to inventories themselves.

Traditionally,the scholarly writing on stock spotlights on creation and acquirement
as the principal determinants of corporate stock strategy and administration. In this
sense,the exchange off between requesting expenses and holding expenses
describes the transactions approach to stock administration spoke to by the EOQ
and (S, s) models of inventory created numerous decades back. As of late, as the
field of operations management has created, numerous new ideas have been added
to the rundown of relevant inventory control themes. These more administration
arranged themes incorporate the material requirements, arranging frameworks
(MRP), without a moment to spare (JIT) and ERP routines while another developing
stream of studies hypothesizes that the qualities of a firm's demand and advertising
situations additionally assume an essential part in determining optimal corporate
inventories.

Overseeing resources of numerous sorts can be seen as a stock issue, for the same
standards apply to money and altered resources as to inventories themselves.
Customarily, the scholastic writing on stock spotlights on generation and acquisition
as the key determinants of corporate stock arrangement and administration In this
sense, the exchange off between requesting expenses and holding expenses
describes the exchanges way to deal with stock administration spoke to by the E0()
and (S, s) models of stock created numerous decades prior. As of late, as the field of
operations administration has created, numerous new ideas have been added to the
rundown of applicable stock control points. These more administration arranged
subjects incorporate the material necessities arranging frameworks (MRP), without a
moment to spare (IIT) and ERP systems while another rising stream of studies
hypothesizes that the attributes of an association's interest and showcasing
situations likewise assume a vital part in deciding ideal corporate inventories.
Despite the hypothetical or down to earth.

This study used three different types of tests. These tests include the descriptive
statistics test, Ordinary Least Squares (OLS) and Pseudo-likelihood ratio tests for sectors and
years have also been used in this study. The descriptive statistics tell about the firm different factors such as net
operating margin, gross margin and inventory have been used in the study. The data of all the forms of three
sectors have been collected and used for these tests. The descriptive statistics tell the mean, median, mode,
standard deviation, minimum , maximum, Q, Q3 and Trmean as well. These are the general facts. The second
test named as Ordinary Least Square has been used in this study. The ordinary least squares have been run for
the purpose of investigating the relationship between variables, efficient inventory strategy and firm
performance. The test limits the analysis up to one industry for one time only. The firm gains and losses have
been linked to the firm performance. The cross sectional model has been used in this study. The pseudo

likelihood ratio tests for sectors and years where linearity has been used. The firm different years p values of
all dependent variables have been used. This test investigates the hypothesis and their comparison that is not a
smooth linear function. It supposes the normality of errors by misusing NW estimator features as well.
Findings of the study
The tests have been conducted in order to investigate the relationship between the efficient management of
inventory and firm profitability. Three sectors/industrial firms have been used for testing the hypothesis. The
aim was to investigate the relationship between these variables on microlevel industry. The results found that
inventory level strategy and firm performance in most industries have significant negative/inverse relationship.
It is significant at 10%. For all regressions the homoscedasticity has been rejected. The chemical sector has
been taken as very important in this sense. For profitability the efficient inventory would be good. The
inventory turnover ratio in this sector is indirect proportion at 1% significance level. The food sector also has a
negative relationship. The weak relationship has been found in textile, it might be possible the non parametric
model can be used for this purpose.

Critical Assessment
This study has been conducted to explore the presence of the expected smooth
relationship between accounting measures and inventory holding as well. Three
different sectors have been used in order to evaluate this issue. It cannot be denied
from the fact that all sectors are not identical regarding their inventory level. The
chemical sector is more sophisticated in this situation. The robust linear relationship
exists in chemical sector only. There is an issue in this study that different models
for different sectors can be used based on parametric and non parametric but it
used only parametric model.