Browsing by Subject "Inventory decisions"
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Item Open Access Inventory performance with pooling: evidence from mergers and acquisitions(Elsevier, 2015) Çömez-Dolgan, N.; Tanyeri B.Theoretical studies show that compared to decentralized inventory management, (i) pooling inventories for different demand sources decreases the optimal safety stock, which in turn decreases inventory costs and (ii) the decrease in stock is related to the correlation between the different demand sources and variabilities of demands. Mergers and acquisitions (M&A) provide a business context to investigate the effects of correlation and variability of the merging firms' demands on potential improvements in inventory performance through inventory pooling. While merging firms may not fully centralize their inventory decisions, the coordination of inventory and supply chain decisions may result in synergies. Using firm-level data for 270 same-industry mergers carried out in U.S. between 1981 and 2009, we find that the inventory turnover of bidder and target firms improves (relative to firms in their industry) following the successful completion of mergers. The improvement in turnover is especially pronounced in deals where the demand of bidder and target firms are negatively correlated prior to the merger. Our results provide novel empirical support for the predictions of theoretical models on inventory economies in M&A.Item Open Access Supporting hurricane inventory management decisions with consumer demand estimates(Elsevier B.V., 2016) Morrice, D. J.; Cronin, P.; Tanrisever, F.; Butler, J. C.Matching supply and demand can be very challenging for anyone attempting to provide goods or services during the threat of a natural disaster. In this paper, we consider inventory allocation issues faced by a retailer during a hurricane event and provide insights that can be applied to humanitarian operations during slow-onset events. We start with an empirical analysis using regression that triangulates three sources of information: a large point-of-sales data set from a Texas Gulf Coast retailer, the retailer's operational and logistical constraints, and hurricane forecast data from the National Hurricane Center (NHC). We establish a strong association between the timing of the hurricane weather forecast, the forecasted landfall position of the storm, and hurricane sales. Storm intensity is found to have a weaker association on overall inventory decisions. Using the results of the empirical analysis and the NHC forecast data, we construct a state-space model of demand during the threat of a hurricane and develop an inventory management model to satisfy consumer demand prior to a hurricane making landfall. Based on the structure of the problem, we model this situation as a two-stage, two-location inventory allocation model from a centralized distribution center that balances transportation, shortage and holding costs. The model is used to explore the role of recourse, i.e., deferring part of the inventory allocation until observing the state of the hurricane as it moves towards landfall. Our approach provides valuable insights into the circumstances under which recourse may or may not be worthwhile in any setting where an anticipated extreme event drives consumer demand.