The Adoption of Inventory Postponement and Speculation: An Empirical Assessment of Oligopolistic Internet Retailers

Logistics and Transportation Review, Vol. 42, No. 4, pp. 258-271, 2006

Posted: 5 Dec 2006

See all articles by Joseph Bailey

Joseph Bailey

University of Maryland

Elliot Rabinovich

Arizona State University - W.P. Carey School of Business

Abstract

Unlike traditional retailers, which use inventory speculation for all their merchandise, Internet book retailers selectively use inventory postponement for specific merchandise items to lower their inventory costs. We develop and test hypotheses that describe merchandise determinants of inventory postponement and speculation at two oligopolistic retailers: Amazon.com and Barnesandnoble.com. We find that merchandise popularity raises both firms' likelihood of inventory speculation. Furthermore, merchandise vintage affects negatively both firms' likelihood of inventory speculation. Merchandise price affects negatively the likelihood of inventory speculation for Amazon.com and positively for Barnesandnoble.com. This may be due to conditions within Barnesandnoble.com, which operates physical and Internet channels.

Keywords: Electronic commerce, Inventory management, Postponement analysis, Empirical study

Suggested Citation

Bailey, Joseph and Rabinovich, Elliot, The Adoption of Inventory Postponement and Speculation: An Empirical Assessment of Oligopolistic Internet Retailers. Logistics and Transportation Review, Vol. 42, No. 4, pp. 258-271, 2006, Available at SSRN: https://ssrn.com/abstract=948797

Joseph Bailey

University of Maryland

College Park
College Park, MD 20742
United States

Elliot Rabinovich (Contact Author)

Arizona State University - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

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