| Session | ||
MD7 - IL4: Flexibility and sharing
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| Presentations | ||
Inventory control for periodic intermittent demand University of Luxembourg, Luxembourg Intermittent demand is difficult to forecast, as many periods have no demand. The time between demands is often not memoryless but –contrary to implicit model assumptions—displays periodicity. Consequently, the time since the last demand is a predictor for future demand. We propose a demand model that accommodates such periodicity and show that the optimal inventory policy is a state-dependent base-stock policy, where the order-up-to-levels depend on the time since the last demand. Managerial flexibility and inventory management 1Syracuse University, United States of America; 2INSEAD We study how managers’ potential personal costs due to shareholder scrutiny affect inventory policies exploiting a quasi-natural experiment. Using a staggered DiD approach, we find that firms incorporated in constituency states increased inventory by 5.2% relative to control firms, indicating a heightened focus on customer service levels. To our best knowledge, our paper is the first to study managerial incentives pertaining to inventory management in a quasi-natural experimental setting. | ||