When the Going Gets Tough, Do the Tough Go Shopping?

in Journal of Business Logistics (in press)

This study examines the impacts of consumer confidence on stockpiling behavior and, subsequently, retail inventory management. We show how stockpiling behavior evolved during the “Great Recession” of 2008 ... [more ▼]

This study examines the impacts of consumer confidence on stockpiling behavior and, subsequently, retail inventory management. We show how stockpiling behavior evolved during the “Great Recession” of 2008-2009 as consumer confidence waned and demonstrate the impact of this development on inventory management. Drawing on the two-segment household inventory theory consisting of non-stockpiling and stockpiling segments, we use a panel dataset (2005-2015) to calibrate household inventory holdings. This dataset then serves as input for a retailer-level case study. Our empirical analysis reveals significant impacts from changing stockpiling behavior. When consumer confidence is low, both stockpiling and non-stockpiling segments respond by reducing weekly consumption rates; however, the stockpiling segment also significantly lengthens the time between shopping trips, and ultimately increases the duration of inventory holdings. These changes to consumption and stockpiling add complexity to inventory planning, requiring retailers to carefully adjust inventory levels to maintain service levels. [less ▲]

Carrier collaboration with endogenous networks: Or, the limits of what carrier collaboration can achieve under antitrust immunity

in Journal of Air Transport Management (2021), 94

Strategic Behavior in a Serial Newsvendor Setting

E-print/Working paper (2021)

Pre-Hurricane Consumer Stockpiling and Post- Hurricane Product Availability: Empirical Evidence from Natural Experiments

in Production and Operations Management (2020), 29(10), 2350-2380

The provision of essential supplies is a key service provided by retailers when demand spikes due to consumer stockpiling during environmental emergencies. Moreover, it is important for retailers to ... [more ▼]

The provision of essential supplies is a key service provided by retailers when demand spikes due to consumer stockpiling during environmental emergencies. Moreover, it is important for retailers to quickly recover from these events by replenishing the stock of essential supplies to meet the continuing needs of local residents. The main purpose of this research is to study consumer precautionary stockpiling behavior prior to the onset of hurricane landfalls and determine the impact of this behavior on in-store product availability for various formats of retail store outlets. Specifically, we focus on the bottled water product category, an essential emergency category in hurricane preparedness. This study combines an event analysis methodology with econometric models using archival retail scanner data from 60 U.S. retail chains located in 963 counties and real-time data from four recent U.S. continental hurricanes. We find that supply-side characteristics (retail network and product variety), demand-side characteristics (hurricane experience and household income), and disaster characteristics (hazard proximity and hazard intensity) significantly affect consumer stockpiling propensity as the hurricanes approach. The increased consumer stockpiling has immediate and longer-term impacts on retail operations, namely, in-store product availability. Among various retail formats, drug stores are associated with the highest consumer stockpiling propensity before hurricanes, while dollar stores and discount stores are associated with the lowest in-store product availability following hurricanes. Our study points to the need for retailers and policymakers to carefully monitor factors affecting consumer stockpiling behavior that will allow for better allocation of critical supplies during the hurricane season. [less ▲]