Abstract for: Understanding Supply Chain Replenishment Decisions

Despite the growing use of supply chain management information systems to automate companies' inventory replenishment decisions, managers are still responsible of these decisions and often have authority approve/modify the final replenishment decisions. There is evidence that biases, e.g., psychological or incentive related, affect these replenishment decisions. In this paper we present the results of study of a retailer that has an automatic store ordering system but that allows category managers to override the system's decisions. Our data consists of over 300,000 decisions made by 60 managers over a period of several months. A more systematic understanding of how and when these biases affect decision making along with their consequences would benefit companies as they seek to improve their inventory decision making capability.