Ordering behavior in a newsstand experiment

Castañeda, Jaime Andrés; Gonçalves, Paulo

doi:10.1016/j.ijpe.2017.12.014

Cited by 12 publications

(10 citation statements)

References 44 publications

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“…The 90 papers deemed to be relevant through this process were cross checked with reference lists of significant preceding works in this research domain. More specifically, we cross checked the reference lists of the two review chapters mentioned earlier (Becker-Peth and Thonemann, 2018; Kremer and Minner, 2008) and seminal literature (Benzion et al , 2008; Bolton and Katok, 2008; Bolton et al , 2012; Bostian et al , 2008; Croson and Donohue, 2006; Lurie and Swaminathan, 2009; Schweitzer and Cachon, 2000; Steckel et al , 2004) and publications over the past couple of years (Castañeda and Gonçalves, 2018; D'Urso et al , 2017; Schultz et al , 2018; Stangl and Thonemann, 2017; Tokar et al , 2016; Villa and Castañeda, 2018; Zhang and Siemsen, 2019; Zhao and Zhao, 2018). This uncovers 11 papers that are not captured by our original search terms.…”

Section: Review Methodologymentioning

confidence: 99%

“…One example is the multilocation newsvendor problem, in which the decision maker is required to make multiple/independent newsvendor decisions (Ho et al , 2010). In addition, a newsvendor problem in which the decision maker must contend with multiple products has also come to the fore (Castañeda and Gonçalves, 2018). Among the most prominent of these new developments is the competing newsvendor problem.…”

Section: Primary Research Clustersmentioning

confidence: 99%

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

Perera

Fahimnia

Tokar

2020

IJOPM

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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.

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Section: Review Methodologymentioning

confidence: 99%

Section: Primary Research Clustersmentioning

confidence: 99%

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

Perera

Fahimnia

Tokar

2020

IJOPM

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“…Consistent with the cognitive dissonance theory, he found that bundling important with non-important items increased the important items' service level. Castañeda and Gonçalves (2018) studied the behavioural biases exhibited by a budget constrained newsvendor, ordering multiple items under high and low profit conditions. They observed that more budget availability favours profit performance for a high profitability item, and service level performance for a low profitability item.…”

Section: Multiple Item Orderingmentioning

confidence: 99%

Inventory decision-making biases: a review and suggestions for future research

Yamini

Gajanand

2021

BIJ

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PurposeThe paper provides a comprehensive overview of the biases in inventory decisions, under the umbrella of behavioural operations, considering research findings that used experimental methods. Research in this field has gained traction but, to the best of our knowledge, review articles that summarize these research findings are scarce. Hence, there is a need to synthesize the anomalies and biases reported in inventory decision-making literature to gain a more integrated understanding.Design/methodology/approachThis study reviews themes relevant to inventory and behavioural operations management from the articles published in recognized top-tier journals during the period between 2000 and 2020 with an aim to build a classification framework. Further, using a systematic review procedure, the relevant research studies are divided into sub-sections and appropriate search strategies are adopted to pleat more information on inventory ordering biases.FindingsThis study presents a classification framework by highlighting the factors influencing the biases in inventory decisions and describes the effects of utility preferences on the decision-making behaviour. It highlights the inventory ordering pattern under unconventional settings and also for different supply chain settings. This systematic review helps in identifying the research gap and in giving directions for future researchers.Originality/valueThe study presents a systematic review and detailed analysis of the research in inventory decision making through a behavioural lens. The study shows a clear direction of progress over the years, and implies new directions for looking beyond placing orders and for moving towards a more integrated approach while making supply chain decisions. It will be useful for researchers and practitioners working on newsvendor decisions, supply chain contracts, behavioural economics, behavioural operations management, bounded rationality theory and experimental economics.

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“…Further, imposing costly penalties may not translate into improved performance. Castañeda and Gonçalves (2017) proposed a debiasing mechanism for newsvendor ordering behavior using cognitive dissonant theory. The results of their experiment showed that making ordering decisions by bundling a high-importance high-safety stock item with a low-importance low-safety stock item (under consonance condition) reduces the bias for the high-importance item.…”

Section: Debiasing Strategies To Improve the Ordering Behaviormentioning

confidence: 99%

Behavioral perspective of newsvendor ordering decisions: review, analysis and insights

Yamini

2020

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PurposeThe traditional newsvendor model has focused on deriving the optimal order quantity that minimises the balance between stocking too much or too less number of products. However, the managers make inventory decisions based on intuitions and shortcuts, which may involve human errors and biases. The effect of cognitive biases and heuristics influencing the inventory ordering decisions in newsvendor settings is highlighted. The advancement of research associated to the newsvendor biases is reviewed to appreciate the behavioral aspects of the minds underlying this process.Design/methodology/approachThe use of experimental and non-experimental methods to investigate the ordering behaviour of newsvendors is described and we present a framework of the existing literature and highlight the research gaps to point to future research possibilities and priorities.FindingsThe proposed framework gives a systematic approach to confirm the existence of a substantial scope of research opportunities and points to specific areas for further research. It synthesizes the existing results of behavioral newsvendor research and will act as a key reference paper. In addition, it will help the practitioners and software tool vendors to comprehend the behavioral perspective of newsvendor preferences and design strategies to mitigate this effect. The insights will be helpful for academicians, researchers and practitioners working in the areas of experimental economics, behavioral economics, behavioral operations, bounded rationality theory, newsvendor modelling and supply chain contracts.Originality/valueA summary of literature in this evolving area of research is very scarce. Considering the impact of behavioral economics on managerial decisions in the contemporary world, it is highly important to have an educational summary which can act as a tool for the practitioners and researchers in the area of behavioral operations management.

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Ordering behavior in a newsstand experiment

Cited by 12 publications

References 44 publications

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

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

Inventory decision-making biases: a review and suggestions for future research

Behavioral perspective of newsvendor ordering decisions: review, analysis and insights

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