Universität zu Köln

Sachs, Anna-Lena ORCID: 0000-0003-4101-5930, Becker-Peth, Michael ORCID: 0000-0002-4496-7702, Minner, Stefan ORCID: 0000-0001-6127-8223 and Thonemann, Ulrich ORCID: 0000-0002-3507-9498 (2022). Empirical newsvendor biases: Are target service levels achieved effectively and efficiently? Prod. Oper. Manag., 31 (4). S. 1839 - 1856. HOBOKEN: WILEY. ISSN 1937-5956

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Abstract

Human decision making in the newsvendor context has been analyzed intensively in laboratory experiments, where various decision biases have been identified. However, it is unclear whether the biases also exist in practice. We analyze the ordering decisions of a manufacturer who faces a multiproduct newsvendor problem with an aggregate service-level constraint. We find that the manufacturer broadly exhibits the same biases as subjects in the laboratory and is prone to another bias that has not been identified before, that is, group aggregation. The bias can be attributed to the multi-product problem of the manufacturer, and refers to the observation that the service levels are not optimized for individual products, but rather for product groups. Our data allow us to analyze the performance of a manufacturer in detail and we find that target service levels are achieved effectively, but not efficiently. We provide rationales for the manufacturer's ordering behavior, discuss managerial implications, and quantify the financial benefits of debiasing ordering decisions.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Sachs, Anna-Lena UNSPECIFIED orcid.org/0000-0003-4101-5930 UNSPECIFIED Becker-Peth, Michael UNSPECIFIED orcid.org/0000-0002-4496-7702 UNSPECIFIED Minner, Stefan UNSPECIFIED orcid.org/0000-0001-6127-8223 UNSPECIFIED Thonemann, Ulrich UNSPECIFIED orcid.org/0000-0002-3507-9498 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-682174
DOI:	10.1111/poms.13650
Journal or Publication Title:	Prod. Oper. Manag.
Volume:	31
Number:	4
Page Range:	S. 1839 - 1856
Date:	2022
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1937-5956
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language DEMAND; JUDGMENT; FEEDBACK; PERIOD Multiple languages Engineering, Manufacturing; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/68217