Inventory management and performance in wholesale industry

Inventory, as an important asset in wholesale industry, has two different effects on the performance. As the cost, inventory will decrease the performance; as the goods variety and service level, it will increase the performance instead. By now, the relationship between the inventory and performance still remains unclear. This article just aims to fill this gap and make an empirical research with the time series data of China and US. By dividing the wholesale industry into four different semi-industries, this article tests the relationship between inventory and performance in different industries, and makes a comparison between China and US. Finally, based on the experience of US, the article gives some suggestions to the Chinese wholesalers.