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The study was planned to examine the mediating role of absorptive capacity in the relationship between the supply chain agility and firm performance. To perform the statistical analysis and data screening we have used SPSS-22 for addressing the research objectives. We have analyzed the instrument’s reliability and validity and hypothesis of the study with the assessment of measurement and structural model by employing the Smart PLS 3.1.2 which is the most recent or latest second generation multivariate analysis technique. We have received 420 questionnaires, out of which we have excluded 35 items as they were not suitable for the analysis. The above studies that presented SCA as a potential mechanism to gain high level of performance by reforming their AC efforts. The companies with superior AC were considered to be in beneficial position through appreciations to new knowledge assimilated, acquired, transformed and practical in those regions that gave SCA advantages. For instance, the companies which had superior AC level could recognize market fluctuations more timely over the others, because they would be more sensitive to evaluate their consumer requirements, new business areas, anticipate competitor’s moves and so on. In the same way, the further information in relation to the areas for example by enhancing the SCA’s dimension of market sensitivity, demand information procedures must permit the companies to targets the customer’s efficiently. AC might be an important component to perform positively in the association of supply chain. Because of the transformation, assimilation and exploitation of the most relevant and acquired external updated knowledge, to align and coordinate resources along the supply chain, companies would know their buyers more or the suppliers could be enhanced by synchronization with suppliers through the use of knowledge and the enhancement of rapid and effective management across the supply chain completely.
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