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Article
Publication date: 18 March 2020

Aneeshta Gunness and Harmen Oppewal

Effects of stockouts on purchase decisions have been examined from a variety of perspectives; little is yet known about how consumers react to stockouts in online shopping…

Abstract

Purpose

Effects of stockouts on purchase decisions have been examined from a variety of perspectives; little is yet known about how consumers react to stockouts in online shopping contexts. The present study investigates how stockout reactions depend on a consumer's mindset and familiarity with a website and investigates the role of negative affect in determining a consumer's stockout reaction.

Design/methodology/approach

Shopping mindsets (deliberative vs. implemental) and website familiarity (high vs. low) were manipulated in an online experiment consisting of a simulated shopping task at an existing website which next was presented as having a stockout. The study observed the participants' switching responses and measured their negative affect.

Findings

Findings indicate that when encountering an online stockout, consumers in an implemental mindset are more likely to switch away from the website than those in a deliberative mindset and are more likely to search for additional items at a competing site. Consumers who are more familiar with the website where they encounter the stockout display a higher likelihood of defecting to a competing site; however, when they are in an implemental mindset, their inclination to defect decreases. The study also shows that the strength of negative emotions affects OOS responses in that buyers that experience more negative emotions are more likely to defect from the site.

Practical implications

The study's findings provide suggestions as to how retailers can manage and minimize defection behaviours associated with online stockouts. In designing operational and marketing strategies retailers need to pay close attention to how consumers' individual mindsets may vary by trait or circumstance and how they hence may respond differently to stockouts.

Originality/value

The authors introduce a novel perspective to the literature on stockout induced reactions and contribute by furthering investigation into previously unexplored specific consumer characteristics and intricacies of stockouts that drive particular stockout reactions.

Details

International Journal of Retail & Distribution Management, vol. 48 no. 4
Type: Research Article
ISSN: 0959-0552

Keywords

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Article
Publication date: 14 November 2016

Sandeep Goyal, Bill C. Hardgrave, John A. Aloysius and Nicole DeHoratius

Perceived as an antidote to poor execution, interest in radio frequency identification (RFID)-enabled visibility has grown. The purpose of this paper is to examine whether…

Abstract

Purpose

Perceived as an antidote to poor execution, interest in radio frequency identification (RFID)-enabled visibility has grown. The purpose of this paper is to examine whether and how RFID-enabled visibility with item-level tagging improves store execution.

Design/methodology/approach

The authors conducted three field-based experiments in collaboration with two Fortune 500 retailers.

Findings

RFID-enabled visibility resulted in a sizable decrease in inventory record inaccuracy and out-of-stocks for inventory held in both the backroom and on the sales floor. The decrease in inventory record inaccuracy and out-of-stocks was even greater among products stored primarily on the sales floor suggesting the benefits from increased visibility accrue to sales floor inventory management processes. In contrast, the authors found no significant improvement in inventory record inaccuracy and no substantive improvement in out-of-stocks among products stored primarily in the backroom suggesting that increased visibility does not improve backroom management processes.

Practical implications

The authors recommend retailers focus on sales floor inventory management when seeking to improve store execution through the adoption of RFID-enabled visibility. In the context, only partial evidence exists that backroom inventory management improves with RFID-enabled visibility.

Originality/value

Retailers seeking to invest in RFID technology must estimate potential performance improvements before making firm-specific cost-benefit analyses. They must also understand where and how these performance improvements will accrue. This research uniquely presents the results of a three field experiments that quantify the changes in retail execution associated with RFID adoption.

Details

The International Journal of Logistics Management, vol. 27 no. 3
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 1 January 1975

C.K. Walter and Bernard J. La Londe

In calculations of inventory control costs, the effects of stockouts are often assumed or avoided because of the lack of accounting data for reasonable measurements. The…

Abstract

In calculations of inventory control costs, the effects of stockouts are often assumed or avoided because of the lack of accounting data for reasonable measurements. The authors describe the development of stockout cost models incorporating decisions made by consumers in an actual retail situation. Equations for calculating the revenue differences are based on the consumer decision alternatives. The results of a consumer survey, combined with retail prices for the product lines in question, enable the financial effects of stockouts to be calculated.

Details

International Journal of Physical Distribution, vol. 5 no. 3
Type: Research Article
ISSN: 0020-7527

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Article
Publication date: 25 January 2013

Joachim C.F. Ehrenthal and Wolfgang Stölzle

The purpose of this paper is to increase our understanding of the causes for stockouts in retailing.

Abstract

Purpose

The purpose of this paper is to increase our understanding of the causes for stockouts in retailing.

Design/methodology/approach

Mixed methods study, using instore observations, interviews with key informants in consumer goods and retailing, and a field study of stockouts and their causes in multiple wholesale stores over two years.

Findings

The results indicate that the causes for stockouts are specific to retailer, store, category and item. Improvements to store operations and the coordination of store delivery and shelf replenishment are most effective in reducing stockouts. Manual audits of stockouts and their causes benefit instore execution and provide the level of detail necessary for management to prioritize areas of improvement.

Research limitations/implications

Future research may investigate the operational and cost impact of incorporating demand seasonality in shelf replenishment that may lead to an improved coordination of replenishment and demand cycles.

Practical implications

A procedure is proposed to help store managers reduce stockouts well below the global average of 8.3 percent.

Originality/value

The paper extends the literature by providing a comprehensive set of itemized causes of retail stockouts and reflects implications for sales‐data driven research. It adds to the emergent research that applies service‐dominant logic to retail stockout research.

Details

International Journal of Physical Distribution & Logistics Management, vol. 43 no. 1
Type: Research Article
ISSN: 0960-0035

Keywords

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Article
Publication date: 8 May 2017

Hsuan-Hsuan Ku, Chien-Chih Kuo and Wan-Ting Huang

This paper aims to investigate the effect of retailers’ consumer communications in prompting the choice of an in-stock alternative to an out-of-stock first-choice product.

Abstract

Purpose

This paper aims to investigate the effect of retailers’ consumer communications in prompting the choice of an in-stock alternative to an out-of-stock first-choice product.

Design/methodology/approach

Four between-subjects experiments assessed the extent to which the likelihood of a retail customer switching to a similarly-priced alternative when a first choice was out-of-stock was affected by messages concerning stockout status (Studies 1a and 1b). They further examined the interaction effects on participants’ preference of messages comparing the available versus unavailable options and stating stockout status (Study 2) and those giving information on the reasons for the stockout and on its status (Study 3).

Findings

Participants maintained their original preference for an out-of-stock product unless an external restriction on choice prompted them to forsake it or they perceived a strong reason to opt for an in-stock alternative. There was a greater tendency to switch if the alternative offered a potential “gain” or the reasons given for a stockout were irrelevant to product performance, whether the participant was expecting imminent re-stocking. Switching was triggered when the available alternative was directly comparable to the original or the retailer’s explanation related to an attribute judged trivial, but only if short supply was expected to continue.

Originality/value

The studies add to current understanding of how shoppers respond to unavailability of a first-choice product by examining the effect on switching behavior of messages about the stockout situation that are communicated deliberately or inadvertently by retailers.

Details

European Journal of Marketing, vol. 51 no. 5/6
Type: Research Article
ISSN: 0309-0566

Keywords

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Article
Publication date: 23 May 2019

Sungil Kim, Heeyoung Kim and Jye-Chyi Lu

This paper aims to propose a statistical method to measure the impacts of stockouts on demand, using a segmented linear regression model.

Abstract

Purpose

This paper aims to propose a statistical method to measure the impacts of stockouts on demand, using a segmented linear regression model.

Design/methodology/approach

The proposed method is applied to data sets from large retail chains to measure the impacts of stockouts of an item on substitute items. The measured impacts of stockouts can be used to estimate the true demand of the sold-out item by recovering the lost demand (turned-away demand), as well as to estimate the true demand of the substitute item by reducing the extra demand.

Findings

This study found that estimated true demand by the proposed method improves sales forecasting and calculation of the annual expected revenue.

Originality/value

A new method to measure the impacts of stockouts on the demand of substitute items was proposed. The proposed method is practical, in that, it is conceptually simple, computationally efficient and applicable in general scenarios. Also, the proposed method is scalable for larger data sets.

Details

Journal of Business & Industrial Marketing, vol. 34 no. 4
Type: Research Article
ISSN: 0885-8624

Keywords

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Article
Publication date: 1 January 1992

Arne Jensen

Details an empirical study of the measurement of stockout costs ina distribution system and examines the incidence of stockouts in thesupply of spare parts to the motor…

Abstract

Details an empirical study of the measurement of stockout costs in a distribution system and examines the incidence of stockouts in the supply of spare parts to the motor trade. Comprehensive studies were conducted in three major car workshops in Sweden and cost data collected from a variety of sources, including structured observation, quasi‐experiments, interviews and secondary data from internal information systems. On the basis of this research, a typology of stockout cost situations has been constructed and central concepts and measurement models developed. Results reveal that stockout costs are measurable in the system under review; information about stockout costs can have a significant impact on managerial decision making.

Details

International Journal of Physical Distribution & Logistics Management, vol. 22 no. 1
Type: Research Article
ISSN: 0960-0035

Keywords

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Article
Publication date: 14 June 2011

Cuneyt Eroglu, Brent D. Williams and Matthew A. Waller

The purpose of this paper is to investigate the direct and interaction effects of shelf space, case pack quantity, and consumer demand on shelf stockouts, i.e. stockouts

Abstract

Purpose

The purpose of this paper is to investigate the direct and interaction effects of shelf space, case pack quantity, and consumer demand on shelf stockouts, i.e. stockouts at the shelf level when inventory is available in the backroom of a retail store.

Design/methodology/approach

This study uses discrete‐event simulation based on data collected from the ready‐to‐eat breakfast cereal category with multiple stockkeeping units (SKUs) to model a retail supply chain consisting of a supplier, a retailer, and consumers.

Findings

The results indicate that shelf space and case pack quantity have direct effects on shelf stockouts. Furthermore, evidence is found for interactions among shelf space, case pack quantity and consumer demand. Though many retailers adopt simple heuristics for shelf space allocation, such as a multiple of case pack quantity, this study suggests that such heuristics tend to over‐ or underestimate shelf space requirements when consumer demand is ignored.

Originality/value

This study suggests that managers should allocate shelf space for SKUs on the basis of not only case pack quantity but also consumer demand.

Details

International Journal of Physical Distribution & Logistics Management, vol. 41 no. 5
Type: Research Article
ISSN: 0960-0035

Keywords

Content available
Article
Publication date: 22 February 2021

Derek Friday, David A. Savage, Steven A. Melnyk, Norma Harrison, Suzanne Ryan and Heidi Wechtler

Inventory management systems in health-care supply chains (HCSC) have been pushed to breaking point by the COVID-19 pandemic. Unanticipated demand shocks due to…

Abstract

Purpose

Inventory management systems in health-care supply chains (HCSC) have been pushed to breaking point by the COVID-19 pandemic. Unanticipated demand shocks due to stockpiling of medical supplies caused stockouts, and the stockouts triggered systematic supply chain (SC) disruptions inconceivable for risk managers working individually with limited information about the pandemic. The purpose of this paper is to respond to calls from the United Nations (UN) and World Health Organization (WHO) for coordinated global action by proposing a research agenda based on a review of current knowledge and knowledge gaps on the role of collaboration in HCSCs in maintaining optimal stock levels and reinforcing resilience against stockout disruptions during pandemics.

Design/methodology/approach

A systematic review was conducted, and a total of 752 articles were analyzed.

Findings

Collaborative planning, forecasting and replenishment practices are under-researched in the HCSC literature. Similarly, a fragmented application of extant SC collaborative risk management capabilities undermines efforts to enhance resilience against systematic disruptions from medical stockouts. The paucity of HCSC articles in humanitarian logistics and SC journals indicates a need for more research interlinking two interdependent yet critical fields in responding to pandemics.

Research limitations/implications

Although based on an exhaustive search of academic articles addressing HCSCs, there is a possibility of having overlooked other studies due to search variations in language controls, differences in publication cycle time and database search engines.

Originality/value

The paper relies on COVID-19's uniqueness to highlight the limitations in optimization and individualistic approaches to managing medical inventory and stockout risks in HCSCs. The paper proposes a shift from a fragmented to holistic application of relevant collaboration practices and capabilities to enhance the resilience of HCSCs against stockout ripple effects during future pandemics. The study propositions and suggestion for an SC learning curve provide an interdisciplinary research agenda to trigger early preparation of a coordinated HCSC and humanitarian logistics response to future pandemics.

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Article
Publication date: 1 July 1991

Scott R. Swenseth and Frank P. Buffa

This article provides a discussion of key components for thedecisionmaker concerned with the logistical issues of implementing aJust‐in‐Time (JIT) manufacturing…

Abstract

This article provides a discussion of key components for the decisionmaker concerned with the logistical issues of implementing a Just‐in‐Time (JIT) manufacturing philosophy. A JIT philosophy promotes reduced cycle times that provide benefits not normally considered in traditional inventory models and presents new concerns for the purchasing and logistics functions. The ramifications are investigated of a JIT implementation using an inventory‐theoretic modelling procedure modified and expanded to incorporate these considerations. The resulting cost comparisons indicate that the lead time variability associated with uncertain transit times in JIT is critical in the determination of order cycle time, order point, safety stock and the holding cost of the safety stock.

Details

International Journal of Operations & Production Management, vol. 11 no. 7
Type: Research Article
ISSN: 0144-3577

Keywords

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