3.5 The Relative Impacts of Capital Intensity and the Degree to Which Companies
Embraced JIT Philosophy over Time As indicated earlier, capital intensity and JIT system tend to have diverse impacts on inventory adjustments and profitability differentials. The results of multiple regression analysis to test the relative impacts of capital intensity and the degree to which companies embraced JIT philosophy on profitability differentials over the nine years studied are shown in Table 11. When net income differential and net income differential as a percentage of sales were used as the dependent variable, the model will be referred to as Model 1 and Model 2, respectively.