The Significance of Stock Management to Jet Fuel Supply using Partial Least Squares

Abstract

Operational and commercial efficiency at a jet fuel depot are vital indices for a jet fuel marketer toward ensuring maximum business productivity. In Nigeria, jet A-1 aviation fuel scarcity is a yearly challenge that periodically triggers jet fuel price increase, air fare price hike and flight cancellation. The causes of the scarcity have been ascribed to the challenges facing jet fuel supply process. In this study, the significance of each of the seven jet fuel depots of a fuel marketer to the overall business performance is analysed using structural equation modelling to evaluate the historical sales and stock data. Historical stock data contains hidden patterns and  knowledge that can be acquired and applied in operational decision making processes. The effect of each depot on business performance is classified using the significance and path coefficient result obtained from the partial least squares model implemented on historical stock data. The analysis reveals the significance of adequate stock level via supply chain management, and this creates an opportunity for directing management policies and decisions at less significant depots based on the data-mined knowledge acquired. An overall model R2 value of 0.902 was achieved. This study therefore emphasises the relevance of quality data even in the aviation fuel industry.Keywords: Business performance analysis, supply chain management, partial least squares, fuel scarcity, jet A-1 aviation fuel, data pattern recognitionJEL Classifications: C53, N77, O25, Q3DOI: https://doi.org/10.32479/ijeep.8978