In this paper we test the predictive power of abnormal inventory growth to forecast retailers’ earnings. We demonstrate an inverted-U relationship between abnormal inventory growth and one-year ahead earnings per share for retailers. We find this relationship to be robust to different measures...

One of the most important trends in the pharmaceutical industry is the rapid growth of specialty drugs. Specialty drugs, mostly bio-based, tend to be high-risk, high-priced, and more regulated than traditional drugs, resulting in unprecedented challenges in distribution. Such challenges lead to...

Many retailers are reducing store footprint and downsizing their assortments accordingly to improve store productivity. Some of the revenue for items removed from the assortment may be recouped by substitution, but also some of the revenue for items kept in the assortment may be lost due to...

Excess inventory announcement is an important issue as it has a huge negative impact on stock returns of the announcing firm. Many firms claim that they announce the buildup of excess inventory because of external factors such as sluggish sales. In contrast, theoretical literature in operations...

This paper shows the benefits of high inventory turnover in responding to demand shocks. We identify quantity- and price-responsiveness as two mediating mechanisms that distinguish how high- and low-inventory-turnover retailers (HIT and LIT retailers, respectively) can manage demand shocks....

Using a novel data set from 75 stores of a department store retail chain that changed its incentive plan for store managers to spur greater cooperation among them and with the corporate office, we examine how incentives impact operational decisions and, consequently, store outcomes. We measure...

We estimate the causal effects of responsible scheduling practices on store financial performance at the US retailer Gap, Inc. The randomized field experiment evaluated a multi-component intervention designed to improve dimensions of work schedules – inconsistency, unpredictability,...

Product drops occur when a retailer releases a limited-edition product line on a specific date for a short period of time. Due to limited inventory of the product and the short sales horizon, a resale market emerges where products may resell at higher prices once the firm stocks out. The firm...

Data-driven decision-making (DDD) is rapidly transforming modern operations. The availability of Big Data, advances in data analytics tool, and rapid gains in processing power enable firms to make decisions based on data, rather than intuition. Yet, most firms still allow managers to override...