Essays on behavioral factors in supply chain

Abstract

This dissertation consists of three essays considering behavioral factors in a supply chain. The first essay examines when and why task division improves operational performance for interdependent subtasks. Specifically, we divide the newsvendor ordering task into two interdependent subtasks: preparing a forecast and setting a service level. Using a behavioral experiment, we demonstrate that the challenge of the task, and therefore, the cognitive burden involved, moderates the relationship between task division and performance. The second essay investigates how a concentrated customer base affected firms’ operating performance during the COVID-19 pandemic. Using a large sample of publicly listed U.S. manufacturing firms and their major customers, we find that the effect of customer concentration levels depends on the phase of the pandemic. The last essay investigates the allocation behavior of suppliers within the supply chain by implementing an inventory allocation experiment. We find that allocation decisions are significantly deviated from the optimal allocation policy, which exacerbates their financial performance. We also find a systematic pattern in the allocation decisions, i.e., suppliers suffer from the anchoring and adjustment heuristics, and have a social preference other than revenue maximization when allocating limited inventory to retail channels.