Determinants of net sale average (NSA) of orthodox black tea factories in high elevation, Sri Lanka

Abstract

Secondary data proved that high grown teas are losing their position as the highest Elevation Average (EA) recorded over the years. As EA is determined by the factory Net Sale Average (NSA), factors affecting NSA are responsible for fluctuations of EA. This study attempts to identify those factors which affect NSA of orthodox black tea factories in high elevation. Data were collected for tea factories representing agro climatic regions in high elevation. Fixed effect panel data regression analysis was employed for the econometric analysis. Results revealed that NSA is determined by main grade percentage, own leaf quantity, best leaf standard, quality certification of factories and number of brokers involved in the selling process. However, Udu Pussellawa sub region shows negative relationship for own leaf and best leaf standard whereas Uva sub region shows negative relationship only for the main grade percentage. The overall results indicate that high elevation factory NSA is determined by the quality of the raw material and final output.The Kelaniya Journal of Management, Vol. 3(1); 2014: 63-85

Keywords

• High elevation
• Tea
• , Determinants
• NSA
• EA
• Quality
• Panel data