The Impact of Supplier Inventory Service Level on Retailer Demand

• 成果类型: Article
• 署名作者: Craig, Nathan; DeHoratius, Nicole; Raman, Ananth
• 署名单位: University System of Ohio; Ohio State University; University of Chicago; Harvard University
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2016.0582
• 发表日期: 2016
• 页码: 461-474
• 关键词: Supply Chain Management; Retailing; Empirical Research; inventory theory and control

摘要

To set inventory service levels, suppliers must understand how changes in inventory service level affect demand. We build on prior research, which uses analytical models and laboratory experiments to study the impact of a supplier's service level on demand from retailers, by testing this relationship in the field. We analyze a field experiment at the supplier Hugo Boss to determine how the supplier's inventory service level affects demand from its retailer customers. We find increases in historical fill rate to be associated with statistically significant and managerially substantial increases in current retailer orders (i.e., demand, not just sales). Specifically, a one percentage point increase in fill rate, measured over the prior year, is associated with a statistically significant 11% increase in current retailer demand, controlling for other factors that might affect retailer demand. We explore the drivers of this demand increase, including changes in retailer assortment and order frequency. We discuss features of a retail buyer's decision context identified through our field work that may explain the magnitude of the relationship we observe.