Supply Chain Risk and its Impact on Equity Volatility
By Kevin Hendricks and Vinod Singhal
on Apr 13, 2010
In their definitive research, Kevin B. Hendricks, Professor of Operations and Information Technology in the School of Business and Economics at Wilfrid Laurier University, and Vinod R. Singhal, DuPree College of Management at Georgia Institute of Technology, analyze the effects of demand-supply mismatches (DSMs) on long-run equity volatility by examining the volatility changes associated with three types of supply chain risks: production disruptions, excess inventory, and product introduction delays.
Profound findings of note: volatility increases of 5.40% for production disruptions, 10.48% for excess inventory, and 10.23% for product introduction delays.
Addressing supply chain risk can have a profound impact on operational metrics, working capital, and strategic (shareholder) value.
You can download (below) their report: An Empirical Analysis of the Effect of Supply Chain Disruptions on Operating Performance.
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