Retail store managers may not follow order advices generated by an automated inventory replenishment system if their incentives differ from the cost-minimization objective of the system or if they perceive the system to be suboptimal. We study the ordering behavior of retail store managers in a...

In this paper we study how the time-series structure of the demand process affects the value of information sharing in a supply chain. We consider a two-stage supply chain model in which a retailer serves autoregressive moving-average (ARMA) demand and a manufacturer fills the retailer's orders....

We address the problem of hedging inventory risk for a short life cycle or seasonal item when its demand is correlated with the price of a financial asset. We show how to construct optimal hedging transactions that minimize the variance of profit and increase the expected utility for a...

Measuring demand uncertainty is a key activity in supply chain planning, but it is difficult when demand history is unavailable, such as for new products. One method that can be applied in such cases uses dispersion among forecasting experts as a measure of demand uncertainty. This paper...

We consider a single-period assortment planning and inventory management problem for a retailer, using a locational choice model to represent consumer demand. We first determine the optimal variety, product location, and inventory decisions under static substitution, and show that the optimal...

We develop a model of consumer learning and choice behavior in response to uncertain service in the marketplace. Learning could be asymmetric, that is, consumers may associate different weights with positive and negative experiences. Under this consumer model, we characterize the steady-state...

Firm-level sales forecasts for retailers can be improved if we incorporate cost of goods sold, inventory, and gross margin (defined by us as the ratio of sales to cost of goods sold) as three endogenous variables. We construct a simultaneous equations model, estimated using public financial and...

Inventory turnover varies widely across retailers and over time. This variation undermines the usefulness of inventory turnover in performance analysis, benchmarking, and working capital management. We develop an empirical model using financial data for 311 publicly listed retail firms for the...

We study the impact of financial innovations on real investmentdecisions within the framework of an incomplete market economy comprisedof fi rms, investors, and an intermediary. The fi rms face uniqueinvestment opportunities that arise in their business operations and canbe undertaken at given...

We study the impact of financial innovations on real investment decisions within the framework of an incomplete market economy comprised of firms, investors, and an intermediary. The firms face unique investment opportunities that arise in their business operations and can be undertaken at given...