Abstract

http://ssrn.com/abstract=1679792
 
 

References (91)



 


 



The Impact of Supplier Reliability on Retailer Demand


Nathan Craig


Harvard Business School

Nicole DeHoratius


University of Chicago - Booth School of Business

Ananth Raman


Harvard University - Technology & Operations Management Unit

April 19, 2013

Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 11-034

Abstract:     
To set inventory service levels, firms must understand how changes in service level affect customer demand. While the effects of service level changes have been studied empirically at the level of the end consumer, relatively little is known about the interaction between a retailer and a supplier. Using data from a manufacturer of branded apparel, we show increases in service level to be associated with statistically significant increases in retailer orders (i.e., demand, not just sales). Controlling for other factors that might affect demand, we find a 1 percent increase in historical service level to be associated with a 12 percent increase in demand from retailers, where historical service level is the type 1 service level performance of the apparel manufacturer over the prior year. Further, we find that retailers that order frequently exhibit a more substantial reaction to changes in service level, an outcome that is consistent with retailers learning about and reacting to changes in supplier service level. Our study not only provides the first empirical evidence of the impact of changes in service level on demand from retailers but also illustrates a method for estimating this relationship in practice.

Number of Pages in PDF File: 34

working papers series


Download This Paper

Date posted: September 20, 2010 ; Last revised: May 3, 2013

Suggested Citation

Craig, Nathan and DeHoratius, Nicole and Raman, Ananth, The Impact of Supplier Reliability on Retailer Demand (April 19, 2013). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 11-034. Available at SSRN: http://ssrn.com/abstract=1679792 or http://dx.doi.org/10.2139/ssrn.1679792

Contact Information

Nathan Craig
Harvard Business School ( email )
Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
Nicole DeHoratius
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

Ananth Raman (Contact Author)
Harvard University - Technology & Operations Management Unit ( email )
Boston, MA 02163
United States
617-495-6937 (Phone)
617-496-4059 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 1,437
Downloads: 378
Download Rank: 42,762
References:  91
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.313 seconds