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Department of Clothing and Textiles, Seoul National University, Seoul, Republic of Korea
Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
c
Department of Management and Marketing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
b
a r t i c l e
i n f o
Article history:
Received 25 February 2011
Accepted 19 April 2012
Available online 11 May 2012
Keywords:
Supply chain management
Supply chain exibility
Instrument development
Scale validation
Measurement model
a b s t r a c t
Supply chain exibility (SCF) represents the capability of rms to respond to unanticipated changes in
customer needs and competitor actions. Given the growing research interest in exibility strategies,
the development of a valid and reliable instrument to measure organizational responses toward environmental uncertainties or risks is imperative. However, no systematic and scientic research has been conducted to develop such an instrument. The present study adopts a comprehensive and rigorous procedure
to develop a multifaceted scale for SCF through an empirical investigation. The results of a conrmatory
factor analysis suggest that SCF can be operationalized as a second-order factor model comprising four
dimensions, namely: sourcing exibility, operating system exibility, distribution exibility, and information system exibility. A series of goodness-of-t indices further demonstrates that this scale is internally consistent, reliable, and valid. The various ndings suggested in the present study provide a more
succinct picture of SCF, and the well-validated scale could be used as a basis for further research and theoretical groundwork in the eld of supply chain management.
2012 Elsevier B.V. All rights reserved.
1. Introduction
Given the ever-changing business environment, resources that
have historically sustained an organizations competitive advantage in business may no longer be viable. In todays globalized
world, competition has gone beyond the boundaries of single rms
and extended across the full supply chain spectrum. It is therefore
essential that supply chain members adjust and recongure themselves to achieve a balance between the responsiveness of their
organizations and changes in the marketplace by increasing their
exibility in all operational activities. Supply chain exibility
(SCF) involves the application of supply chain resources according
to marketing dynamics, and requires rms to develop cross-functional and cross-company strategies that eliminate bottlenecks
and create a level of performance that allows rms to strengthen
their competitive advantage in an uncertain market. From the view
of supply chain management (SCM), a number of strategic options
can be utilized to increase SCF; for example, multiple supplier relationships could be set up to enable organizations to nd another
Corresponding author. Address: Department of Clothing and Textiles, Seoul
National University, 1 Gwanak-ro, Gwanak-gu, Seoul 151-742, Republic of Korea.
Tel.: +82 2 880 6871; fax: +82 2 880 6841.
E-mail addresses: tcmoonkl@gmail.com, tcmoonk@snu.ac.kr (K.K.-L. Moon),
Candace.polyu@gmail.com (C.Y. Yi), mswtngai@inet.polyu.edu.hk (E.W.T. Ngai).
1
Tel.: +852 2766 7296; fax: +852 2765 0611.
0377-2217/$ - see front matter 2012 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.ejor.2012.04.027
backup supplier in case of supply breakdown, or to activate additional logistics channels if peaks (Garavelli, 2003).
Although research on exibility is considerable and its importance has been recognized for some time, much of the research
has concentrated on intra organizational exibility and has focus
largely on manufacturing systems (e.g., Gerwin, 1993; Koste and
Malhotra, 1999; Slack, 1983; Upton, 1994; Vokurka and OLearyKelly, 2000; Gupta and Somers, 1996). Flexibility studies from
the supply chain perspective, however, have thus far been limited.
The lack of a theoretical base and the wide array of measures used
by individual researchers have been identied as major causes of
the incomplete state of knowledge of SCF (Beach et al., 2000;
Stevenson and Spring, 2007; De Toni and Tonchia, 1998). Given
these problems, we undertook an empirical study among rms
within the textile and clothing industry in China to determine
how an instrument with a set of multi-item measurement scales
representing the SCF construct could be developed and validated.
The remainder of this paper is organized as follows. Section 2
outlines the theoretical background based on relevant literature.
Section 3 discusses the development of the scale items, and thus
the research instrument, while Section 4 explains how required
data was collected. In Section 5, we present the procedure for purifying the measurement models and identifying the component factors of the scales. We then report the results of a validation process
for each of the component factors and a model test of the SCF scale.
In Sections 6 and 7, concluding remarks are made, and theoretical
192
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
and managerial implications are analyzed, and limitations and future research are discussed.
2. Theoretical background and literature review
For decades, exibility as a research topic has been discussed
from both economic (e.g., Devereux and Engel, 2003; Jones and Ostroy, 1984) and organizational (e.g., Boynton and Victor, 1991;
Golden and Powell, 2000) perspectives. In this section, we rst review the literature regarding manufacturing exibility and the
emerging studies on SCF. We then measure the inadequacy of
the extant research on SCF against our objective to develop a validated SCF scale.
2.1. Manufacturing exibility
In the area of operations management, exibility was initially
proposed for the manufacturing sector to see how manufacturers
could deal with unexpected changes in their production processes,
such as equipment breakdowns, variable task times, queuing delays, and re-workings (Sethi and Sethi, 1990; Dixon, 1992; Gupta
and Goyal, 1989). In this regard, manufacturing exibility concerns
the degree to which an organization possesses a variety of actual
and/or potential procedures, as well as the rapidity with which it
can implement these procedures to increase its control capability
over its environment (Bernardes and Hanna, 2009; De Leeuw and
Volberda, 1996; Zhang et al., 2003). Manufacturing exibility is
typically dened in terms of range, mobility, and uniformity; specically, it refers the various states a system can adopt, the ability
to move from making one product to another, and the ability to
perform comparably well when making any product within a specied range (Slack, 1983; Upton, 1994; Gupta and Somers, 1992).
The various components of manufacturing exibility have been
built up over time and presented hierarchically from shop oor up
to rm level. Slack (1983) described ve types of manufacturing
exibility (i.e., new product, product mix, quality, volume, and
delivery), while Gerwin (1993) examined seven types (i.e., mix,
changeover, modication, volume, rerouting, material, and responsiveness). Later, Vokurka and OLeary-Kelly (2000) extended these
to 15 (i.e., machine, material handling, operations, automation, labor, process, routing, product, new design, delivery, volume, expansion, program, production, and market). Despite their different
taxonomies, these studies all examined the principal procedures
of manufacturing systems, within which strong interdependencies
among many of the suggested components were found; for example, mix and routing exibility were both inuenced by the degree
of machine exibility.
2.2. Supply chain exibility
With inter-rm competition being extended to inter-chain
competition, in which upstream suppliers and downstream distributors cooperate to deliver value to customers, the concept of exibility needed to be expanded from manufacturing to supply chain
scenarios. This required inter-functional and partnership perspectives, and an avoidance of approaches that were inward-looking and self-focused (Holmberg, 2000). The concept of SCF was
then proposed and has been studied ever since (e.g., Beamon,
1999; Duclos et al., 2003; Vickery et al., 1999; Das, 2011). Lummus
et al. (2003) contend that SCF refers to the promptness of a supply
chain in responding to customer demand and the degree to which
it can adjust its speed, destinations, and volume in response to various market changes. The Supply Chain Council (2006, p.7) also
came up with a performance-based denition of SCF: The agility
of a supply chain in responding to marketplace changes to gain
or maintain competitive advantage.
Several studies have adopted the approach of relating components found in the literature on manufacturing exibility to the
wider context of the supply chain. Vickery et al. (1999) outline ve
components of SCF from an integrative, customer-oriented perspective, namely, volume exibility, product exibility, distribution exibility, access exibility, and new product introduction
exibility. Among these components, the rst two are related to
manufacturing systems, the next two are used to investigate marketing, and the last is related to new product research and design.
However, although these studies attempt to extend the investigative boundary from a single department/process to multiple
departments/processes, they remain focused on the internal perspective of a particular rm.
Other research has contributed to the exibility literature by
focusing on internal issues inherent at the plant or rm level, together with a wider range of external processes, including sourcing,
procurement, and logistics (Stevenson and Spring, 2007). Garavelli
(2003) and Snchez and Prez (2005) examined two main aspects
of SCF: process exibility and logistics exibility. Process exibility
concerns the number of product types that can be manufactured at
each production site, regardless of where they are located. Logistics
exibility refers to the different logistics strategies that can be
adopted to release a product into a marketplace or to procure a component from a supplier. Similarly, Swafford et al. (2006) proposed a
three-dimensional SCF that includes procurement/sourcing exibility, manufacturing exibility, and distribution/logistics exibility.
2.3. SCF scale a research gap
SCM and exibility may have been among the leading concerns
of operations management in recent years, but the studies that focus on SCF remain inadequate (Garavelli, 2003; Gong, 2008). One
major limitation of the previous studies is that most of them have
been conducted within the connes of a single rm, thereby
neglecting other important aspects of a supply chain, especially
those related to upstream suppliers and downstream distributors.
Consequently, the proposed exibility options are incapable of
including the multiple interdependencies that exist among supply
chain partners. Another restriction of existing research is its lack of
insight into the application by organizations of information technology (IT) to adapt to changing circumstances. Because of the
important role of information systems in a supply chain, the inclusion of IT in the study of SCM is inevitable.
Furthermore, a comprehensive and widely accepted theoretical
framework for measuring SCF has yet to be formulated (Bernardes
and Hanna, 2009; De Toni and Tonchia, 1998). Without a reliable
and well-validated scale, it is impossible to adequately measure
the exibility of a supply chain in responding to the ckle demands
of todays market or to compare the level of exibility of one supply chain with that of another (Stevenson and Spring, 2007). Moreover, it is difcult to understand how exibility affects a supply
chains performance and/or other organizational attributes. It was
therefore our intention to study the basic nature of SCF and to integrate its various dimensions to form a reliable and well-validated
measurement scale. We anticipate that through a comprehensive
and rigorous validation process, a well-dened measurement model and a highly validated research instrument can be obtained,
which can be applied to empirical studies and, in turn, may generate substantive theories. Particularly, our results can be of help in
providing a means for measuring the intensity of exibility for the
companies in the textile and clothing industry.
3. Development of a research instrument for SCF
The methodology we used to develop the research instrument
for SCF followed the recommendations outlined by Churchill
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
193
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K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
Table 1
Initial measurement items for supply chain exibility and their references.
Labels
Measurement items
Related studies
Swafford et al. (2006)
Swafford et al., 2006
Lummus et al. (2003) and Swafford et al. (2006)
Lummus et al. (2003) and Swafford et al. (2006)
Lummus et al., 2003 and Swafford et al. (2006)
Koste et al. (2004), Pagell and Krause (1999) and Sawhney (2006)
Koste et al. (2004) and Sethi and Sethi (1990)
Koste et al. (2004) and Sethi and Sethi (1990)
Koste et al. (2004) and Sethi and Sethi (1990)
Gupta and Somers (1996) and Koste et al. (2004)
Swafford et al. (2006)
Swafford et al. (2006)
Swafford et al. (2006)
Swafford et al. (2006)
Swafford et al. (2006)
Lee (2000) and Lee and Whang (2000)
Lee (2000) and Lee and Whang (2000)
Lee (2000) and Lee and Whang (2000) and Fredericks (2005)
Respondent
Respondent
Respondent
Respondent
Respondent
Respondent
Respondent
Total score:
1
2
3
4
5
6
7
SF
OSF
DF
ISF
5
4
5
5
4
5
4
5
4
5
5
4
4
4
4
5
4
4
5
4
5
3
3
2
3
2
3
3
32 (91%)
31 (89%)
31 (89%)
19 (90%)
Notes: The number in each cell represents the number of items correctly sorted into
the corresponding construct.
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
195
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K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
Table 3
Proles of respondent companies and informants.
No. of employees
n (rm)
Below 200
200500
5011000
10012500
Over 2500
Unknown
64
59
25
21
18
5
%
33.3
30.7
13.0
10.9
9.4
2.6
n (rm)
Below 5
5<10
10<50
50<100
Over 100
Unknown
14
35
55
42
41
5
%
7.3
18.3
28.5
21.9
21.4
2.6
Informantsjob title
n (person)
Executive
Middle/senior
management
Professional
18
9.4
143
31
74.5
16.1
Table 4
Descriptive statistics, alpha scores, and EFA results.
Items
1
SF-1
2
SF-2
3
SF-3
4
OSF-2
5
OSF-3
6
OSF-4
7
OSF-5
8
DF-3
9
DF-4
10
DF-5
11
ISF-1
12
ISF-2
Descriptives
Mean
SD
5.85
1.240
5.45
1.345
5.27
1.994
5.51
1.314
5.35
1.380
5.22
1.423
4.80
1.520
4.89
1.450
4.98
1.497
4.08
1.830
4.33
1.794
4.27
1.721
Reliability
Item-total
Cronbachs alpha
.552
.693
.516
.469
.525
.796
.699
.647
.568
.608
.740
.626
.490
.790
.883
.790
EFA
Factor loading
Eigenvalue
Total variance explained
(cumulative)
.847
1.575
13.126%
68.967%
.769
.677
.712
3.785
31.544%
.827
.744
.748
.820
1.855
15.460%
.846
.735
.916
1.061
8.838%
.918
197
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
Table 5
Inter-item correlations and violations of discriminant validity.
Items
Inter-item correlations
SF-1
SF-2
SF-3
OSF-2
OSF-3
OSF-4
OSF-5
DF-3
DF-4
DF-5
ISF-1
ISF-2
SF-1
SF-2
SF-3
OSF-2
OSF-3
OSF-4
OSF-5
DF-3
DF-4
DF-5
ISF-1
ISF-2
1
.498
.426
.171
.211
.333
.143
.110
.094
.013
.010
.009
1
.386
.243
.342
.366
.158
.209
.205
.145
.054
.113
1
.242
.245
.321
.219
.228
.208
.107
.002
.025
1
.539
.436
.350
.162
.136
.134
.204
.211
1
.597
.526
.177
.216
.120
.240
.260
1
.524
.177
.221
.102
.203
.241
1
.244
.219
.119
.294
.279
1
.629
.430
.232
.216
1
.454
.151
.136
1
.207
.261
1
.790
Violations
P
k2
CR P 2 P
k 1 k2
P 2
k
AVE P 2 P
k 1 k2
Table 6
Measurement properties of the component factors of SCF.
Component/item
SF
1. SF-1
2. SF-2
3. SF-3
.736
.677
.576
.542
.458
.332
CR = 0.7965
AVE = 0.5685
OSF
4. OSF-2
5. OSF-3
6. OSF-4
7. OSF-5
.614
.825
.739
.649
.377
.681
.546
.421
CR = 0.8720
AVE = 0.6332
DF
8. DF-3
9. DF-4
10. DF-5
.799
.787
.557
.638
.619
.310
CR = 0.8427
AVE = 0.6466
ISF
11. ISF-1
12. ISF-2
.881
.901
.776
.812
CR = 0.7981
AVE = 0.8793
a
b
198
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
indices, namely, CFI, GFI, and AGFI are greater than the threshold level of 0.9; and RMR and RMSEA are lower than 0.08. All these reveal
stronger evidence for the existence of convergent validity; that is,
the observed indicators are good representatives of their respective
latent constructs (Hair et al., 2006).
5.3.4. Testing for discriminant validity
Discriminant validity represents the degree to which a dimension in a theoretical system differs from other dimensions in the
same system (Churchill, 1979). In the present study, we used three
tests to conrm the discriminant validity of the four component
factors of the SCF: (1) correlations comparison (Koufteros et al.,
1998), (2) the pair-construct test (Segars and Grover, 1998), and
(3) the AVE versus shared variance test (Farrell, 2010).
We checked the initial discriminant validity by comparing the
lowest correlation for a particular item and any other items within
the same factor (within-factor correlations) with the correlations
of that item and all items outside the factor (between-factor correlations) (Koufteros et al., 1998). If the within-factor correlation was
less than any between-factor correlation, then a violation would
have occurred. In examining the correlation matrix in Table 5, we
found no violation to this rule among the 106 possible comparisons. Initial evidence of discriminant validity was hence supported.
In the pair-construct test, we compared the v2 values of each of
the unconstrained models, which estimated (or freed) the correlation between a pair of constructs of the four component factors of
SCF, with the nested constrained models, which xed the value of
the construct correlation to one (Segars and Grover, 1998). If there
was a signicant v2 difference between the two models, the
unconstrained model would be a better t for the data and thereby
support the existence of discriminant validity. Table 7 shows the
results of this test, in which the v2 differences range from 5.378
to 28.875 and all are signicant at the 0.05 level, providing further
evidence of discriminant validity.
Finally, we examined the discriminant validity by comparing
the AVE of each construct with the shared variance between constructs. Shared variance is the amount of variance that one construct is able to explain in another construct (Farrell, 2010). It is
represented by the square of the correlation between any two constructs. Discriminant validity can be supported if the AVE for each
construct is greater than its shared variance with any other construct. Table 7 shows that all AVE estimates of SF, OSF, DF, and
ISF are higher than each of the shared variance values between
each pair of constructs. Such results provide further evidence of
conrming the discriminant validity of the four component factors
of SCF (Fornell and Larcker, 1981).
5.4. Developing and testing the overall measurement model for SCF
To achieve our ultimate goal of proposing a reliable and valid
measurement model for SCF, we set up ve alternative competing
models (see Fig. 1) based on the approach of Xia and Lee (2005).
Likewise, we examined the model tness in line with the conceptualization of the SCF construct using CFA in SEM. The ve models
are as follows: (1) a null model in which all measures were uncorrelated to one another, (2) a model in which all measures were
loaded onto a single rst-order factor, (3) a model in which the
measures were loaded onto four uncorrelated rst-order factors,
(4) a model in which the measures were loaded onto four correlated rst-order factors, and (5) a model in which the four rst-order factors were loaded onto a second-order factor of SCF. These
models were tagged as Model 1 to Model 5, respectively.
Table 8 shows the results of these ve competing models. Models 1, 2, and 3 were unacceptable because most of their goodnessof-t indices failed to meet the threshold criteria. In contrast, we
could preliminarily accept Models 4 and 5, namely, the correlated
four-factor rst-order model and the four-factor second-order
model, because all t indices satisfy the threshold criteria. The results of the estimation of these two models are also shown in Figs.
2 and 3, respectively.
For the correlated four-factor rst-order model, the scales of SF,
OSF, DS, and ISF are correlated but not governed by a common latent factor, yet all the model summary statistics and the goodnessof-t indices suggest a sound t for it. The v2 statistic is 51.41
(df = 48; p = 0.342) and is insignicant at the 0.05 level; normed
v2 is 1.071, well below 3.00. Meanwhile, CFI (0.995), GFI (0.958),
and AGFI (.932) are all higher than 0.9, and RMR (0.102) and
RMSEA (0.019) are below or close to 0.1. For the four-factor
second-order model, the test results illustrate that a higher-order
latent factor, that is, the overall trait of SCF, governs the correlations among the constructs of SF, OSF, DF, and ISF. The v2 statistic
is 61.563 (df = 50; p = 0.127) and normed v2 is 1.231. The goodness-of-t indices of CFI (0.984), GFI (0.951), AGFI (0.923), RMR
(0.147), and RMSEA (0.035) all meet or are close to the threshold
criteria. As a whole, the four proposed factors t the dataset well
and that the two measurement models can represent the scale of
SCF.
To compare the efcacy of these two acceptasble models, we
continued to check the values of the consistent Akaike information
criterion (CAIC), which is an assessment for improvement over
competing models. In general, lower CAIC values reect the model
with better t (Milfont and Duckitt, 2004). The results in Table 8
show that the CAIC of the second-order model (236.773) is lower
than that of the correlated rst-order model (239.134), suggesting
that the second-order model possesses better parsimony.
Subsequently, we checked the target (T) coefcient, which is a
comparison of the v2 statistics of the lower-order model and the
higher-order model (Marsh and Hocevar, 1985). This coefcient
has a ceiling value of one, with a higher value implying that
the relationship among lower-order factors is sufciently captured by the higher-order factor (Segars and Grover, 1998). In
our study, the T coefcient is rather high (0.835), indicating that
Table 7
Pair-construct test and AVE versus shared variance test.
Pairs
Pair-construct test
v2 Values
SF with OSF
SF with DF
SF with ISF
OSF with DF
OSF with ISF
DF with ISF
a
v2 Difference
Constrained model
Unconstrained model
46.126
33.774
33.568
35.620
19.276
13.456
20.997
9.562
4.693
9.464
8.191
8.078
(df = 14)
(df = 9)
(df = 5)
(df = 14)
(df = 9)
(df = 5)
(df = 13)
(df = 8)
(df = 4)
(df = 13)
(df = 8)
(df = 4)
25.129
24.212
28.875
26.156
11.085
5.378
SF
OSF
DF
ISF
SF
OSF
DF
ISF
.5685
.541
.315
.062
.293
.6332
.332
.372
.099
.110
.6466
.286
.004
.138
.082
.8793
Correlations are below the diagonal, shared variances are above the diagonal, and AVE estimates are presented on the diagonal.
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
199
information about the relationships between the higher-order construct and the lower-order factors in the form of path coefcients
(i.e., the k of SF = 0.57, OSF = 0.91, DF = 0.40, and ISF = 0.39), rather
than in the form of correlations (i.e., the c of SF-DSF = 0.54,
SF-DF = 0.32, SF-ISF = 0.06, OSF-DF = 0.33, OSF-ISF = 0.37, and
200
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
Table 8
Model t test of the ve alternative models.
Criteria
2
df
p-Value
v2/df
CFI
GFI
AGFI
RMR
RMSEA
CAIC
Threshold
Model 1
Model 2
Model 3
Model 4
Model 5
(>0.050)
(<3.0)
(>0.9)
(>0.9)
(>0.8)
(<0.1)
(<0.1)
.000
0
1.000
1.000
.000
0.242
488.085
408.377
54
.000
7.563
.519
.741
.625
.341
.185
558.557
.000
0
1.000
1.000
.000
0.242
488.085
51.409
48
.342
1.071
.995
.958
.932
.102
.019
239.134
61.563
50
.127
1.231
.984
.951
.923
.147
.035
236.773
SF M OSF = .54
SF M DF = .32
SF M ISF = .06
OSF M DF = .33
OSF M ISF = .37
DF M ISF = .29
SCF ? SF = .57
SCF ? OSF = .91
SCF ? DF = .40
SCF ? ISF = .39
.45
SF-1
.67
.71
SF
e1
.50
SF-2
.61
e2
.37
SF-3
e3
.37
OSF-2
.54
.61
.80
OSF
.76
.32
.06
e4
.64
.65
OSF-3
e5
.58
OSF-4
e6
.43
OSF-5
.33
e7
.63
.37
DF-3
.79
.79
DF
DF-4
.56
.29
e8
.63
e9
.31
DF-5
e10
.78
ISF-1
.88
ISF
2=51.409
CFI=.995
RMR=.102
.90
e11
.80
ISF-2
e12
df=48
p =.342
2/df =1.071
GFI =.958
AGFI =.932
RMSEA =.019
Fig. 2. Correlated four-factor rst-order model of SCF.
201
K.K.-L. Moon et al. / European Journal of Operational Research 222 (2012) 191203
e 13
.46
.33
SF-1
.68
.72
SF
e1
.51
SF-2
.59
e2
.35
SF-3
.57
e3
.37
OSF-2
e 14
.84
.91
e4
.64
.61
.80
OSF
.76
.65
SCF
OSF-3
e5
.58
OSF-4
e6
.43
OSF-5
.40
e 15
.60
.16
.39
e7
.78
.81
DF
DF-3
e8
.66
DF-4
.56
e9
.31
DF-5
e 16
.15
ISF
e 10
.73
ISF-1
.85
.93
e 11
.86
ISF-2
e 12
=61.563 df=50
p=.127
/ =1.231
CFI=.984
GFI=.951
AGFI=.923
RMR =.147 RMSEA=.035
2
202
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