Inventory and ordering decisions: a systematic review on research driven through behavioral experiments

Abstract

PurposeThe success of a supply chain is highly reliant on effective inventory and ordering decisions. This paper systematically reviews and analyzes the literature on inventory ordering decisions conducted using behavioral experiments to inform the state-of-the-art.Design/methodology/approachThis paper presents the first systematic review of this literature. We systematically identify a body of 101 papers from an initial pool of over 12,000.FindingsExtant literature and industry observations posit that decision makers often deviate from optimal ordering behavior prescribed by the quantitative models. Such deviations are often accompanied by excessive inventory costs and/or lost sales. Understanding how humans make inventory decisions is paramount to minimize the associated consequences. To address this, the field of behavioral operations management has produced a rich body of research on inventory decision-making using behavioral experiments. Our analysis identifies primary research clusters, summarizes key learnings and highlights opportunities for future research in this critical decision-making area.Practical implicationsThe findings will have a significant impact on future research on behavioral inventory ordering decisions while informing practitioners to reach better ordering decisions.Originality/valuePrevious systematic reviews have explored behavioral operations broadly or its subdisciplines such as judgmental forecasting. This paper presents a systematic review that specifically investigates the state-of-the-art of inventory ordering decisions using behavioral experiments.

Home sharing in marketing and tourism at a tipping point: What do we know, how do we know, and where should we be heading?

“… Method-based reviews are dedicated to analyzing the utilization of a specific method in a subject area. Examples of method-based reviews include the use of structural equation modeling in marketing ( Hair, Hult, Ringle, Sarstedt, & Thiele, 2017 ), the use of qualitative case research in international entrepreneurship ( Ji, Plakoyiannaki, Dimitratos, & Chen, 2019 ), and the use of behavioral experiments in operations and production management ( Perera, Fahimnia, & Tokar, 2020 ). Meta-analytical reviews are focused on statistical assessments of prior empirical research on a specific research topic, whereby the common effects are identified through consistency in the direction of effect, effect size, and statistical power, and the reason for variations are explained.…”

“…Method-based reviews are dedicated to analyzing the utilization of a specific method in a subject area. Examples of method-based reviews include the use of structural equation modeling in marketing ( Hair, Hult, Ringle, Sarstedt, & Thiele, 2017 ), the use of qualitative case research in international entrepreneurship ( Ji, Plakoyiannaki, Dimitratos, & Chen, 2019 ), and the use of behavioral experiments in operations and production management ( Perera, Fahimnia, & Tokar, 2020 ).…”

“…Future research could review the collection of concepts and theories relating to home sharing and analyze their unique peculiarities, the evolvement and development of these existing concepts and theories in the field, and to consolidate and refine their boundaries for furthering conceptual and theory advancement. The methods-based review is also another option that future scholars can consider to strengthen the building blocks of home sharing predicated on first-order knowledge ( Hair et al, 2017 ; Ji et al, 2019 , Perera et al, 2020 ). In particular, future research could conduct an in-depth review covering the ontological, and epistemological considerations that could be used to promote methodological rigor in conceptualization and operationalization endeavors in home-sharing research.…”

“… To consolidate and refine concepts and theories based on a review of existing concepts and theories for home sharing using theory-based reviews (see Gilal et al, 2019 , Paul and Rosado-Serrano, 2019 , Hassan et al, 2016 ). To strengthen methodological rigor in the conceptualization and operationalization of concepts and theories in home-sharing research using methods-based reviews ( Hair et al, 2017 ; Ji et al, 2019 , Perera et al, 2020 ). …”

Results of Beer Game Trials Played by Natural Resource Managers Versus Students: Does Age Influence Ordering Decisions?

“…More recent advances in decision making research using simulations of the Beer Game task have shown that coordination risk (the risk that individuals' decisions contribute to a collective outcome but the decision rules followed by each individual are not certain) which contributes to the bullwhip effect can be mitigated with coordination stock (holding additional on-hand inventory) but that the behavioral causes of the supply chain instability are robust [68,[79][80][81]. Sterman and Dogan [69] show that because of this persistence of instability, individuals are likely to seek larger safety stocks (hoarding) or order more than what is demanded of them (phantom ordering).…”