= 0.065. Other variables are not significant in explaining the Inventory and Financial Risks dimension of SCM. 4.11 Results of the hypothesis Testings of the Moderating Variable From the earlier chapters, is obvious that supply chain management performance will greatly impact the company performance and in order to have an effective supply chain, the existence of inventory is key important. But we also understand that keeping high inventory is not only bad in terms of the tied up of the operating fund and there are also risks attached to such action. The study is to find out if financial risk is the
moderator of this relationship. To test the moderating effect, Esposito Vinzi et al. (2010) states that first need to examine the main effects of the independent variable(s) on the dependent variable. Next, test the independent variable together with the moderating variable on the dependent variable and finally, multiply the independent variable with the moderating variables which will produce the interaction variable, and use this in the dependent variable. Hair Jr. et al. (2013) confirm that moderating effect is only valid when the interaction variable is significant. The test of moderating effect was conducted and the following reports are obtained. To test the moderating effect of Financial Risks (SCM cost) on the relationship between inventory management strategies and on-time delivery, a dimension of Supply Chain Management, a hierarchical regression analysis was conducted. The first model of the analysis took into consideration of the independent variable (IMS) and
supply chain management cost which is one of the dimensions of the moderating variable (Financial risk) with the on-time delivery as the first dimension of the dependent variable (SCM).
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