B2C E-commerce for Home Appliance in The Brazilian Market: A Cost Efficiency Investigation through a DEA-OCT Model

Abstract

Objective: to investigate the cost efficiency of inventory management for publicly home appliance retail companies in the Brazilian market that operate, among other channels, with B2C (Business-to-Costumer) and discuss the possible impacts of ecommerce on inventory management. Method: the first step, construction of a descriptive summary of Magazine Luiza and seven other competitors; the second step, analysis of the optimal cost efficiency of companies' inventory management, through an integrated and dynamic model of Data Envelopment Analysis (DEA) and Optimal Control Theory (OCT). Amounts declared in the Quarterly Financial Statements between the fourth quarter of 2010 and the second quarter of 2018 were considered. Main Results: the discovery of best practices and the fact that, despite its extraordinary appreciation, Magazine Luiza was not a reference in inventory management and its costs during the analyzed period as a whole. Relevance/Originality: this article is an initial step to address the lack of studies on e-commerce for emerging markets and inventory management and its costs for ecommerce. Methodological Contributions: the proposition of a methodology that can be used by other researchers to assess the cost efficiency of inventory management and the impact of e-commerce, highlighting best practices.

Measuring the performance of retailers during the COVID-19 pandemic: Embedding optimal control theory principles in a dynamic data envelopment analysis approach

“…In 2002, Stochastic Frontier Analysis (SFA) was also proposed [25] . The differences between both approaches have been widely explored in the literature [26] , [27] , [28] , [29] . Although no approach fits all situations [26] , DEA enables easy dealing with multiple metric units and multiple outputs [ 27 , 28 ].…”

“…[18] , [19] , [20] , [21] applied the models to the balance sheet data of publicly traded companies from various industries in Brazil and Chile. However, inventory treatment in the retailing industry is very particular and different from other industries [ 10 , 27 , 57 ]. Also, the original models did not consider essential variables for retailing, such as Gross Margin ( GM ), Plant, Property, and Equipment ( PPE ), Inventory Slack ( InvSlack ), and Capacity Slack ( CapSlack ) [10] .…”

“…Also, the original models did not consider essential variables for retailing, such as Gross Margin ( GM ), Plant, Property, and Equipment ( PPE ), Inventory Slack ( InvSlack ), and Capacity Slack ( CapSlack ) [10] . Finally, inflation is non-neglectable when dealing with financial accounting, especially in emerging markets [ 11 , 27 , 57 ].…”

“…1 . In other words, it considers the inventory under inflationary conditions [ 11 , 27 , 57 ] and incorporates a critical variable for retailing activities, GM [ 8 , 10 ]. Also, it deals with variables representing digital and physical performance aspects, respectively, CapSlack and InvSlack [ 8 , 10 ].…”

Supporting the Bidding Decisions of Smallholder Farmers in Public Calls in Brazil

“…Although the SBM model has already been applied with composite index tie-breaking for international supply chain management [40][41][42][43], the combination with a double-frontier composite index and HN structure is a novelty. In this way, besides the social relevance for supporting bid/no-bid decisions of smallholder farmers, the present paper also brings a methodological novelty in the DEA literature.…”