Hypothesis 8

The eighth hypothesis was formulated to determine if there is an association between the six industry groups and whether they would pay a higher delivery cost if their supplier could deliver their inventory sooner than usual. The hypothesis was stated as follows:

H8: There is an association between the industry groups and whether they would pay a higher delivery cost if their supplier could deliver their inventory sooner than usual.

The results of the Pearson Chi-Square test on hypothesis 8 are presented in table 5.22.

Table 5.22 Pearson Chi-Square test results on hypothesis 8

Value Df

Asymptotic significance (2-

sided)

Pearson Chi-Square 1.291^a 5 .936

N of Valid Cases 538

a 3 cell (25.0%) have expected count less than 5. The minimum expected count is 3.58 Source: Compiled by the researcher from survey results

The result of the Pearson Chi-Square test indicated that there is no statistically significant association, at the 5% level of significance, between the industry groups and whether they would pay a higher delivery cost if their supplier could deliver their inventory sooner than usual (p = 0.936). Regardless of the industry they operated in, the respondents generally are not willing to pay a higher delivery cost to their supplier in order to receive inventory faster than usual.^EF24

By examining the inferential analyses of the different industry groups in terms of the different transportation statements, and their willingness to pay an additional fee for faster delivery of inventory, it seems as if the formal independent small retail businesses manage transportation based on either responsiveness or cost-efficiency, depending on the types of products they sell.

Depending on the reason (whether the retailers find it easier to transport the inventory themselves or prefer to have more control over the delivery process) retail grocery general stores manage transportation more responsively or more cost-efficiently than the other industries. It seems that retailers in the retail auto industry tend to manage transportation focused more on cost-efficiency than the other industry groups.

5.6 Conclusion

Chapter 5 focused on determining whether the formal independent small retail businesses operating within Soweto manage their logistical supply chain drivers orientated toward responsiveness or cost-efficiency. Both descriptive and inferential analyses were conducted on each logistical supply chain driver.

According to the descriptive findings, the formal independent small retailers manage their facilities responsively. Further inferential findings indicated that retail general stores manage their facilities more responsively than the other industry groups, possibly due to the retailers’ focus on keeping ample inventory and having easy access to excess inventory more frequently. Through the descriptive findings, it was determined that the formal independent small retailers’ inventory management is orientated towards responsiveness. The inferential findings showed that retail grocery stores tend to be the most responsive among the different industries; mainly by making provision for fluctuation in customer demand. The inferential analyses also indicated that retail general stores tend to manage inventory more cost-efficiently than the other industries. According to the data, retail general stores manage facilities more responsively, but inventory more cost-efficiently, which may be problematic, as maintaining a higher level of responsiveness decreases the cost-efficiency of the retailer. Both the descriptive and inferential analyses indicated that transportation is managed orientated towards either responsiveness or cost-efficiency, depending on the types of products sold. The twenty-four empirical findings in chapter 5 are presented in table 5.23.

Table 5.23 Empirical findings in chapter 5

Empirical findings in this chapter

EF1: Retailers operating within Soweto manage their facilities responsively by:

a) being located near to customers (section 5.3.1.1), b) being located near to public transport (section 5.3.1.2),

c) providing customers with a fast checkout at their facilities (section 5.3.1.3), d) having capacity to store excess inventory in their stores (section 5.3.1.4), e) accessing excess inventory quickly and easily (section 5.3.1.5).

EF2: The industry group in which the retailer operates, does not influence the importance rating by the retailer in terms of:

a) being located near to customers, b) being located near to public transport,

c) providing customers with a fast checkout at their facilities (section 5.3.2.1).

EF3: The industry group in which the retailer operates. influences how frequently they:

a) have capacity to store excess inventory in store,

b) access excess inventory quickly and easily (section 5.3.2.2).

EF4: Retail general stores tend to manage facilities more responsively by having capacity to store excess inventory in store and accessing excess inventory quickly and easily, more frequently than the other industry groups (section 5.3.2.2).

EF5: Small retailers operating within Soweto purchase inventory most frequently from wholesalers (section 5.4.1.1),

EF6: Retailers operating within Soweto who manage their inventory responsively:

a) have the ability to easily obtain more inventory from suppliers (section 5.4.1.1), b) purchase inventory on a daily or weekly basis (section 5.4.1.1),

c) purchase more inventory than they sell within a month (section 5.4.1.2),

d) purchase more inventory when they have a sale in their stores (section 5.4.1.2), e) make provision for fluctuation in customer demand (section 5.4.1.2),

f) have products immediately available to a customer when they want to buy it (section 5.4.1.2),

g) believe that their customers are of the opinion that they will have enough inventory (section 5.4.1.2),

h) stock quality and a variety of products (section 5.4.1.2).

EF7: Retailers operating within Soweto who manage their inventory cost-efficiently:

a) find it too expensive to purchase more inventory than they sell within a month (section 5.4.1.2),

b) purchase more inventory when items are on sale at suppliers (section 5.4.1.2).

EF8: The industry group in which the retailer operates, influences how often, on average, they purchase inventory (section 5.4.2.1).

EF9: Retail hardware stores tend to purchase inventory less often (only when they see that their inventory level is low) than the other industry groups (section 5.4.2.1).

EF10: The industry group in which the retailer operates, does not influence how frequently they:

a) purchase less inventory than they sell within a month (section 5.4.3.2),

b) purchase the exact amount of inventory that they sell within a month (section 5.4.3.2),

c) purchase more inventory than they sell within a month (section 5.4.3.2),

d) find it too expensive to purchase more inventory than they sell within a month (section 5.4.3.2),

e) purchase more inventory when they have a sale in their stores (section 5.4.3.2).

EF11: The industry group in which the retailer operates, influences how frequently they:

a) can easily obtain more inventory from suppliers if they run out of inventory, b) purchase more inventory when it is on sale at their suppliers,

c) make provision for fluctuation in customer demand (section 5.4.2.2).

EF12: Retail hardware stores tend to easily obtain more inventory from their suppliers more frequently than the other industry groups (section 5.4.2.2).

EF13: Retail general stores tend to purchase more inventory more frequently than the other industry groups when it is on sale at a supplier (section 5.4.2.2).

EF14: Retail grocery stores tend to make provision for fluctuation in demand from customers more frequently than the other industry groups (section 5.4.4.2).

EF15: The industry group in which the retailer operates, does not influence their level of agreement on having:

a) a product immediately available to customers when they want to buy it (section 5.4.2.3),

b) customers know that they will always have enough inventory (section 5.4.2.3).

EF16: The industry group in which the retailer operates, does not influence the importance rating on:

a) carrying quality products (section 5.4.2.4), b) having enough product variety (section 5.4.2.4).

EF17: Retailers operating within Soweto who manage their transportation responsively:

a) never have inventory delivered directly to their stores by their suppliers (section 5.5.1.1),

b) always use their own cars to collect inventory (section 5.5.1.4),

c) do not collaborate with other retailers to collect inventory (for both of their stores) from suppliers (section 5.5.1.6),

d) are not willing to wait longer for inventory in order to pay less for the inventory (section 5.5.1.7).

EF18: Retailers operating within Soweto who manage their transportation cost-efficiently:

a) have inventory delivered directly to their stores by their suppliers (section 5.5.1.1), b) never pay a supplier to deliver inventory directly to their stores (section 5.5.1.2), c) never pay a supplier more than competing retailers to receive their inventory

faster (section 5.5.1.3),

d) always use their own cars to collect inventory (section 5.5.1.4),

e) collect inventory by using a transportation opportunity (section 5.5.1.5), f) never pay a higher delivery fee to receive inventory faster than usual (5.5.1.8).

EF19: The industry group in which the retailer operates, does not influence how frequently they:

a) pay suppliers to deliver inventory directly to their stores (section 5.5.2.1),

b) pay a supplier more than a competing retailer to receive their inventory faster (section 5.5.2.1),

c) collect inventory by making use of a transportation opportunity (section 5.5.2.1), d) collaborate with other retailers to collect inventory (for both of their stores) from

suppliers (section 5.5.2.1).

EF20: The industry group in which the retailer operates, influences how frequently they:

a) have inventory delivered directly to their stores by their suppliers (section 5.5.2.1), b) collect inventory by using their own transportation (section 5.5.2.1),

c) are willing to wait longer to pay less for inventory (section 5.5.2.1).

EF21: Retail hardware stores have inventory delivered directly to their stores more frequently than the other industries (section 5.5.2.2).

EF22: Retail general stores tend to collect their inventory by using their own cars more frequently than the other industries (section 5.5.2.2).

EF23: Retail auto stores tend to be more willing to wait longer to pay less for their inventory than the other industry groups (section 5.5.2.2).

EF24: The industry group in which the retailer operates, does not influenced how frequently they pay a higher delivery fee to receive inventory faster than usual (section 5.5.2.2)

Source: Compiled by the researcher

Chapter 6

Predicting the survival of Sowetan small retailers through binary logistic regression models

6.1 Introduction

Chapter 5 concluded that formal independent small retail businesses operating within Soweto manage facilities and inventory orientated more towards responsiveness and manage transportation oriented towards either responsiveness or cost-efficiency. The purpose of this chapter is to determine whether the management of the three logistical supply chain drivers influences the survival of the formal independent small retail businesses. Two binary logistic regression models are developed to determine whether the survival of the formal independent small retail businesses can be predicted. In section 6.2 an overview of a binary logistic regression model is provided and the dependent and independent variables necessary for developing the two binary logistic regression models for this study, are identified. The first model (discussed in section 6.3) aims to predict the survival of the small retailers in terms of the age of the business, and the second (discussed in section 6.4) to predict the survival of the small retailers based on the income change pattern for the past year (hereafter referred to as growth). The two literature and eight empirical findings of this chapter are presented in table 6.4.