Impact of Inventory on Production Smoothening in FMCG Supply Chain

Anchal Garg, Sachin Gupta (), Santosh Kumar and Atanu Bhuyan
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Anchal Garg: Vivekananda School of Economics, Vivekananda Institute of Professional Studies- Technical Campus, GGSIPU
Sachin Gupta: Vivekananda School of Economics, Vivekananda Institute of Professional Studies- Technical Campus, GGSIPU
Santosh Kumar: University of Delhi, Faculty of Management Studies
Atanu Bhuyan: IIM Jammu, Department of Operations Management

A chapter in Proceedings of the International Conference on Policies, Processes and Practices for Transforming Underdeveloped Economies into Developed Economies (PPP-UD 2025), 2025, pp 146-159 from Springer

Abstract: Abstract The FMCG sector is the cornerstone of any economy with significant contribution to GDP, employment and economic growth. The study aims to explore the relationship among production, demand, inventories and profit before interest and tax for FMCG sector in context of India. For analysis a panel data is employed with 64 firms of Indian FMGC sector, over 10-year time span from 2013-2023. To analyze cost structures and production, ordinary least square (OLS), fixed effect model and random effect model is utilized. It is found that demand, inventories and profit before interest and tax significantly impact Production. Furthermore, higher profitability helps firms to minimize their cost of production and operational costs. The study also highlights the unobserved heterogeneity across firms after employing Breusch- Pagan and Hausman test, illustrating variations in production techniques due to firm specific policies and strategies. Moreover, the inventories plays a significant role in production smoothening.

Keywords: FMCG; panel data analysis; inventories; profit; BSE sectoral Indices (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-894-3_11

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