Financial aspects of changes in the level of finished goods inventory in a mining enterprise
 
More details
Hide details
1
Silesian University of Technology, Faculty of Organization and Management, Zabrze, Poland
 
Gospodarka Surowcami Mineralnymi – Mineral Resources Management 2014;30(4):143–162
 
KEYWORDS
ABSTRACT
The research problem in this article is formulated as follows: which factors influence the changes in inventory levels in Polish mining enterprises, and what are the financial consequences of such changes? Based on the results of analyses conducted on vital changes affecting demand for hard coal, it may be necessary to implement certain changes (above others) in the structure of the sources of satisfying the energy needs of Poland, given price fluctuations in the global hard coal markets. However, the changes in the structure advance relatively slowly in light of the data presented; therefore, they are not the main reason for sales deterioration and stock accumulation. The main reason is increasing unit costs leading to a lack of price competitiveness when global coal prices fall below a certain level. The effects of an excess inventory level includes prolonging the inventory turnover cycle in days, decreasing the level of quick liquidity, and clearly decreasing operating cash flow. The enterprise also has to bear indirect inventoriable costs, losing the possibility of alternative use of the financial resources that are frozen in inventory, while searching for additional financing sources for the operating activities.
METADATA IN OTHER LANGUAGES:
Polish
Finansowe aspekty zmian poziomu zapasów produktów gotowych w przedsiębiorstwie górniczym
nadmierne zapasy, determinanty zapasów, przedsiębiorstwo górnicze, źródła finansowania, górnictwo węgla kamiennego
W niniejszym artykule problem badawczy sformułowano następująco: Jakie czynniki wpływają na zmiany poziomu zapasów w polskich przedsiębiorstwach górniczych i jakie są finansowe konsekwencje tych zmian? Zgodnie z wynikami przeprowadzonych analiz wśród istotnych zmian wpływających na zapotrzebowanie na węgiel kamienny można wskazać przede wszystkim zmiany w strukturze źródeł zaspokajania potrzeb energetycznych w Polsce oraz zmienność cen na międzynarodowych rynkach węgla kamiennego. Przy czym pierwsze z wymienionych, w świetle przedstawionych danych, postępują stosunkowo wolno, nie są więc główną przyczyną pogorszenia zbytu i kumulacji zapasów. Do skutków nadmiernego poziomu zapasów należy zaliczyć: wydłużenie cyklu obrotowości zapasów w dniach, obniżenie poziomu płynności szybkiej oraz wyraźne zmniejszenie operacyjnych przepływów pieniężnych. Przedsiębiorstwo ponosi także pośrednie koszty utrzymania zapasów, tracąc możliwości alternatywnego wykorzystania środków zamrożonych w zapasach oraz poszukując dodatkowych źródeł finansowania działalności operacyjnej.
 
REFERENCES (54)
1.
AA 1994. Act of 26th September 1994 on Accounting (Dz.U.2013.330) (in Polish).
 
2.
Agrawal, N. and Smith, S.A. 2013. Optimal inventory management for a retail chain with diverse store demands. European Journal of Operational Research 225(3), pp. 393–403.
 
3.
Andersson et al. 2010 – Andersson, H., Hoff, A., Christiansen, M., Hasle, G. and Løkketangen, A. 2010. Industrial aspects and literature survey: Combined inventory management and routing. Computers & Operations Research 37(12), pp. 2041–2061.
 
4.
Bąk, M. ed. 2003. Financial accounting. Wroclaw: Wroclaw University of Economics, 192 p. (in Polish).
 
5.
Bednorz, J. 2012. The decarbonisation of the European Union as a threat to its energy security and sustainable development. Polityka Energetyczna – Energy Policy Journal 15(3), pp. 181–195 (in Polish).
 
6.
Bo, Z. and Junhai, M. 2011. Price Index Forecast by a New Partial Least Squares Regression. Procedia Engineering 15, pp. 5025–5029.
 
7.
Czerny, J. 2009. Financial accounting. Selected issues. Poznan: Higher School of Trade and Accounting, 319 p. (in Polish).
 
8.
Dadacz, J. 2012. National Accounting Standards with the Accounting Act. Gdansk: Centre for Consultancy and Training Personnel Ltd, 780 p. (in Polish).
 
9.
de Vries, J. 2013. The influence of power and interest on designing inventory management systems. International Journal of Production Economics 143(2), pp. 223–241.
 
10.
Dubiński, J. and Turek, M. 2012. Opportunities and threats for the development of coal mining in Poland. Wiadomości Górnicze – Mining News 11, pp. 626–633 (in Polish).
 
11.
Elsayed, K. and Wahba, H. 2013. Reinvestigating the relationship between ownership structure and inventory management: A corporate governance perspective. International Journal of Production Economics, 143(1), pp. 207–218.
 
12.
Frączek, P. and Kaliski, M. 2012. The Deregulation of Natural Gas Markets and its Consequences for Gas Recipients in the EU. Archiwun Górnictwa – Archives of Mining Sciences 54(4), pp. 739–752.
 
13.
Gabrusewicz, W. ed. 2005. Functions of accounting in corporate management. Scientific Papers of Poznan University 60. Poznan: Poznan University of Economics, 168 p. (in Polish).
 
14.
Godziszewski B. 2001. Resource conditions of corporate strategy. Torun: UMK, 208 p. (in Polish).
 
15.
Grądzka, C. 2009. Models of cost accounts [In:] Szczęsny, W. and Turyna, J. eds. Financial conditions for the development of business organizations. Theory and practice of budgeting. Warsaw: University of Warsaw, 507 p. (in Polish).
 
16.
Guan, Z. and Zhao, X. 2011. Pricing and inventory management in a system with multiple competing retailers under (r, Q) policies. Computers & Operations Research 38 (9), pp. 1294–1304.
 
17.
Hamisu et al. 2013 – Hamisu, A.A., Kabantiok, S. and Wang,M. 2013. Refinery scheduling of crude oil unloading with tank inventory management. Computers and Chemical Engineering 55, pp. 134–147.
 
18.
Jang et al. 2012 – Jang, Ch.J., Xuan, X. and Jacson, R.B. 2012. China’s coal price disturbances: Observations, explanations implications for global energy economies. Energy Policy 51, pp. 720–727.
 
19.
Jonek-Kowalska, I. 2011a. Examination of financial conditions in operational activity of mining enterprises [In:] Turek, M. ed. Models of financing operational activity of mining enterprises. Katowice: GIG, pp. 117–136 (in Polish).
 
20.
Jonek-Kowalska, I. 2011b. Evaluation of the costs of manufacturing, oriented to improve the efficiency of the Polish hard coal mining. Zeszyty Naukowe Uniwersytetu Szczecińskiego – Scientific Papers of University of Szczecin 639, Finance, Financial Market and Insurances 37, pp. 49–58 (in Polish).
 
21.
Kamiński J. 2011. Market power in a coal-based power generation sector: The case of Poland. Energy 36, pp. 6634–6644.
 
22.
Kiedrowska, M. ed. 2004. Financial accounting. Poznan: Poznan University of Economics, 182 p.
 
23.
Li et al. 2009 – Li, A.B., Zhou, B. and Lu, M.Y. 2009. Economic analysis and realization mechanism design for full cost of coal mining. Procedia Earth and Planetary Science 1, pp. 1686–1694.
 
24.
Magda et al. 2009 – Magda, R., Głodzik, S., Jasiewicz, J. and Woźny, T. 2009. Concept of an Information System Supporting the use of Technical Means of Production in the Design of Mine Workings. Archiwum Górnictwa – Archives of Mining Sciences 54(1), pp. 79–86.
 
25.
Mason et al. 2012 – Mason, A., Shaw, A. and Al-Shamm, A. 2012. Peer-to-peer inventory management of returnable transport items: A design science approach. Computers in Industry 63(3), pp. 265–274.
 
26.
Michalak, A. 2011. The problems of operational activity financing of mining enterprises in Poland [In:] Theory of Management 3. Zilina: University of Zilina, pp. 34–39.
 
27.
Michalak, A. 2012. Dilemmas of Equity Cost Calculation in Polish Mining Enterprises. Journal of US-China Public Administration 9(9), pp. 1008–1019.
 
28.
Nowak, E. 2010. The cost account in an enterprise. Wroclaw: Expert Publishing and Consulting, 263 p. (in Polish).
 
29.
Olkuski, T. 2011. Coal – the most reliable source of energy. Przegląd Górniczy – Mining Review 7–8, pp. 42–45 (in Polish).
 
30.
Olkuski, T. 2013. Hard coal import dependence of Poland. Gospodarka Surowcami Mineralnymi – Mineral Resources Management 29(3), pp. 115–130 (in Polish).
 
31.
Ozguven, E.E. and Ozbay, K. 2013. A secure and efficient inventory management system for disasters. Transportation Research Part C 29, pp. 171–196.
 
32.
Papież, M. and Śmiech, S. 2013. Causality-in-mean and causality-in-variance within the international steam market. Energy Economics 36, pp. 594–604.
 
33.
Popek, S. and Kłak, D. 2009. Creation of competitive advantage based on product quality. Przedsiębiorstwo i Region – Enterprise and Region 1 pp. 27–37 (in Polish).
 
34.
Probierz, K. and Marcisz, M. 2010. Estimation of the Hard Coal Quality in a Deposit in View of National and International Standards. Archiwum Górnictwa – Archives of Mining Sciences 55(4), pp. 847–863.
 
35.
Relvas et al. 2013 – Relvas, S., Magatao, S.N.B., Barbosa-Povoa, A.P.F.D. and Neves, Jr. F. 2013. Integrated scheduling and inventory management of an oil products distribution system. Omega 41(6), pp. 955–968.
 
36.
Samelak, J. 2005. The concept of a financial statement according to the Conceptual Framework and the International Standard No. 1 and Polish accounting law [In:] Gabrusiewicz, W. ed. The functions of accounting in corporate management. Szczecin: University of Szczecin, pp. 45–69 (in Polish).
 
37.
Schwartz et al. 2006 – Schwartz, J.D.,Wang,W. and Rivera, D.E. 2006. Simulation-based optimization of process control policies for inventory management in supply chains. Automatica 42(8), pp. 1311–1320.
 
38.
Sierpińska, M. and Bąk, P. 2012. Financial structure of mining sector companies during an economic slowdown. Archiwum Górnictwa – Archives of Mining Sciences 57(4), pp. 1089–1100.
 
39.
Sierpińska, M. and Jachna, T. 2007. Methods of financial decision-making: an analysis of examples and cases. Warsaw: PWN, 604 p. (in Polish).
 
40.
Skawińska, E. 2002. Competitiveness of enterprises – a new approach. Warsaw–Poznan: PWN, 232 p. (in Polish).
 
41.
Sobańska, I. ed. 2009. The cost account. Warsaw: C. H. Beck, 509 p. (in Polish).
 
42.
Stala-Szlugaj, K. and Klim, A. 2012. Russian and Kazakh coal in the Polish market. Polityka Energetyczna – Energy Policy Journal 15(4), pp. 229–240 (in Polish).
 
43.
Sun et al. 2013 – Sun, Q., Xu,W. and Xiao,W. 2013. An empirical estimation for mean-reverting coal prices with long memory. Economic Modelling 33, pp. 174–181.
 
44.
Szczęsny,W. and Turyna, J. eds. 2009. Financial conditions for the development of business organizations. Theory and practice of budgeting. Warsaw: University of Warsaw, 507 p. (in Polish).
 
45.
Turek. M. 2013. Costs as a primary factor in determining operational activity of coal mines [In:] Turek, M. ed. Analysis and evaluation costs in the coal mining industry in Poland.Warsaw: Difin, pp. 111–122 (in Polish).
 
46.
Turek, M. and Jonek-Kowalska, I. 2010. The concentration of industrial enterprises. The causes, stages and effects. Gliwice: Silesian University of Technology, 147 p. (in Polish).
 
47.
Turek, M. and Jonek-Kowalska, I. 2009. Assessment of financial liquidity as a criterion in decision-making in mining enterprises [In:] Szkoła Eksploatacji Podziemnej 2009 – School of Underground Mining 2009. Cracow: The Mineral and Energy Economy Research Institute of Polish Academy of Science, pp. 115–125 (in Polish).
 
48.
Turek,M. and Michalak, A. 2013. The total and unit costs of production in coal mines – changes and determinants [In:] Turek M ed. Analysis and evaluation costs in the coal mining industry in Poland. Warsaw: Difin, pp. 57–64 (in Polish).
 
49.
Turyna, J. 2008. Financial accounting. Warsaw: C. H. Beck, 307 p. (in Polish).
 
50.
Walińska, E. ed. 2010. Financial accounting. Warsaw: Wolters Kluwer Publishers, 477 p. (in Polish).
 
51.
Wanke, P.F. 2008. The uniform distribution as a first practical approach to new product inventory management. International Journal of Production Economics 114(2), pp. 811–819.
 
52.
Xu et al. 2012 – Xu, Y., Wanga, L., Chen, Z., Shan and S., Xia, G. 2012. Optimization and adjustment policy of two-echelon reservoir inventory management with forecast updates. Computers & Industrial Engineering 63(4), pp. 890–900.
 
53.
Yüzgec et al. 2010 – Yüzgec, U., Palazoglu, A. and Romagnoli, J.A. 2010. Refinery scheduling of crude oil unloading, storage and processing using a model predictive control strategy. Computers and Chemical Engineering 34(10), pp. 1671–1686.
 
54.
Zarzecki, D. ed. 2011. Scientific Papers University of Szczecin 639, Finance, Financial Market, Insurances, 37. Szczecin: University of Szczecin (in Polish).
 
eISSN:2299-2324
ISSN:0860-0953