The Determinants of the Operational Performance for Food Ingredient Suppliers

This paper aims to analyze the factors that influence customer profit contribution for a food ingredient supplier by using a case study. A total of 644 corporate clients of this supplier are sampled from January 2007 to December 2009. By running a multiple regression model, this paper conducts an empirical analysis in order to understand the factors that influence the customer profit contribution. It is hoped that the research findings can provide a reference for the management of the supplier in question. The results show that prices, credit days, and transportation distance are negatively correlated with the customer profit contribution. All of the other factors such as the percentage of compound products, customer loyalty, and business intensity are all positively correlated with the customer profit contribution. This paper can serve as a reference to food ingredient suppliers for risk management, the planning of working capital, business strategies, revenue targets, and customer loyalty. This can also assist suppliers in the adjustment of supply chains in order to pursue sustainable growth in a highly competitive market.