How Do Delivery Variety Decisions Contribute to Sales? An Empirical Study on Demand and Supply Integration

Abstract

This study empirically assesses the value of decisions on offering delivery variety (the number of different methods of truck transport used to deliver products to buyers). Rooted in the literature on demand and supply integration, we develop the relationship between delivery variety decisions and sales through the mediating role of unit fill rate. We find that a decision to increase delivery variety will indirectly improve sales through the mediating role of the fill rate. Furthermore, our results suggest that decisions on order variety (the number of ordering methods offered to buyers) moderates this mediation effect. A decision to increase order variety enhances the benefits of delivery variety. We estimate our models using archival data including deliveries, order fulfillment, sales records, and other operational data over three years. When the number of delivery methods increases from 1 to 3, fill rates increase by 1.22% and sales increase by 15.39%, and when the number of order methods increases from 1 to 4, the impact of delivery variety on fill rates increases by an additional 0.39% and on sales by an additional 4.68%. These findings provide empirical support for the integration of demand and supply associated with decision making in supply chains and underscore the need for top management to consider the complementary benefits of delivery variety and order variety on order fulfillment and sales.

An empirical examination of the use of bargaining power and its impacts on supply chain financial performance

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Impact of conflict delisting and relisting on remaining products in retail stores: Sales gains across products categories and spillovers to nearby stores

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