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As more firms look to implement omnichannel strategies to mitigate the inherent information barriers between online and offline channels, understanding the outcomes of these initiatives is critical. This study empirically examines the impact of the decision to share brick‐and‐mortar (B&M) store product availability information with customers, specifically focusing on the scenario where a discrepancy exists in the product assortment of online and offline channels. We investigate the impact of this information sharing strategy on customer research shopping trajectories using a proprietary dataset collected from a leading North American retailer. Using a difference‐in‐differences approach, we find that this strategy helps boost the overall sales from customers who reside within the trade area of a retail store. At the channel level, the policy induces customers to migrate from the B&M channel to the online channel after learning that the product selection offered at their local retail store may not meet their needs, resulting in a significant increase in online sales, but a slight decrease in B&M sales. From an operational perspective, our empirical evidence suggests that sharing retail store product availability information leads to more customers using the expedited shipping service when shopping online. Furthermore, we also discover a slight increase in the overall return rate. We conclude by providing managerial implications on the functionality of the online and B&M channels and how retailers can coordinate services offered by both channels to improve the utility customers receive from the brand. Highlights • This study examines the impact of sharing brick‐and‐mortar (B&M) store product availability on sales, order fulfillment, and product returns in an omnichannel context. • Using a quasi‐field experimental design based on proprietary data collected from a leading North American retailer, this study shows that customers utilize this new information to adjust their shopping plans and avoid unsuccessful shopping trips, leading to increased sales for the brand. • This study underscores the benefits of improving information transparency between a firm and its customers. It also contributes to the discussion on omnichannel product assortment planning and the future role of B&M stores. [ABSTRACT FROM AUTHOR]

Continuous review is used to evaluate customer service and manage the inventory in emergency transshipments.

Research is presented concerning the management of transshipments between stock-keeping facilities with excess inventory and those with shortages. Two heuristics to determine the time of stock transfer are discussed.

Economies of scale have been defined concisely as advantages resulting purely from size(1) and have been studied extensively.(2) Further, scale economies have been categorized by source--Pratten identified seven of them: [...]

Intermodal railroad-truck (IRT) service is where one or more motor carriers provide the short-haul pickup and delivery service (drayage) part of the trip and one or more railroads provide the [...]

Business Logistics Management, Fourth Edition, by Ronald H. Ballou. Prentice-Hall: Upper Saddle River, NJ, 1999. Pp. 681. ISBN 0-13-795659-2. $75.00. The fourth edition of this textbook continues its tradition of [...]

This study empirically assesses the value of decisions on offering delivery variety (the number of different methods of truck transport used to deliver products to buyers). Rooted in the literature on demand and supply integration, we develop the relationship between delivery variety decisions and sales through the mediating role of unit fill rate. We find that a decision to increase delivery variety will indirectly improve sales through the mediating role of the fill rate. Furthermore, our results suggest that decisions on order variety (the number of ordering methods offered to buyers) moderates this mediation effect. A decision to increase order variety enhances the benefits of delivery variety. We estimate our models using archival data including deliveries, order fulfillment, sales records, and other operational data over three years. When the number of delivery methods increases from 1 to 3, fill rates increase by 1.22% and sales increase by 15.39%, and when the number of order methods increases from 1 to 4, the impact of delivery variety on fill rates increases by an additional 0.39% and on sales by an additional 4.68%. These findings provide empirical support for the integration of demand and supply associated with decision making in supply chains and underscore the need for top management to consider the complementary benefits of delivery variety and order variety on order fulfillment and sales. [ABSTRACT FROM AUTHOR]

The article examines alternative inventory approaches of emergency transshipments to order splitting and their effects on total cost drivers. Emergency transshipments are employed in order to maintain inventory presence in local markets. By keeping decentralized facilities open and stocked, a firm is able to fill immediately a large proportion of demand from inventory, thereby preserving high levels of customer service through minimal average order cycle times. When demand is unexpectedly high and cannot be filled from on-hand inventory, an emergency transshipment from another facility with sufficient stock also preserves high levels of customer service through maximal inventory availability. The difference in leadtime pooling between transshipments and order splitting is the timing of order placement. All parts of the split order are placed with suppliers at the same time. If the vendors offer approximately the same customer service in terms of leadtime means and variances, then ail the shipments should be received at roughly the same time. In the case of transshipments, however, because the order placements are independent, there is no reason to expect any relationship between receipts.

The focus of this article is to show, how a portfolio effect model can be employed to evaluate the use of transshipments to reduce safety stocks in a company and under what conditions it may be effective to do so. A transshipment occurs when goods are shipped to the customer from a facility other than the primary one. The reason for using transshipments is that, when customer demand is greater than on-hand inventory at a primary stocking facility, inventory from other locations can be used to avoid a stockout. While the primary drawbacks associated with transshipments are increased transportation costs and response times, the chief benefit is increased inventory availability or, conversely, reduced safety stocks. In order to test the applicability of the portfolio effect model to the case of transshipments, a single-echelon logistics system is considered. Representing this exemplary system, a simulation model has been developed having the same five assumptions underlying the portfolio effect model when applied to transshipments.

Recent logistics research has focused attention on the effects of consolidating multilocation inventory facilities on safety stock. This discussion has centered around the square-root law and the portfolio effect. The body of literature has now reached the point at which alternative models produce substantially different results. The purpose of this paper is twofold: (1) to analyze two contrasting theoretical approaches, both incorporating lead times, for estimating the portfolio effect and (2) to examine the effect of lead times, in part using actual firm data, on the portfolio effect. First, pertinent multilocation literature relating to the portfolio effect is reviewed. Second, two portfolio effect models are discussed and compared. Third, industrial data are used to explore consolidation issues. Finally, sensitivity analysis of the preferred model is performed, and managerial implications are identified. [ABSTRACT FROM AUTHOR]

The article focuses on the use of transshipments to fill demand only when the stock-keeping facility in the originating market cannot fill the demand. Application of the portfolio effect model to transshipments has been previously considered in a restrictive case. Specifically, a set proportion of demand in a market is transshipped from stock-keeping facilities located in different markets, regardless of whether there is sufficient inventory in the originating market. Transshipments enable a firm to obtain statistical economies of scale. These have been defined as advantages that result from the pooling of uncertainty and the principal potential benefits are fewer stock outs and lower safety stock levels. Holding the level of aggregate inventory constant, a transshipment policy improves overall inventory availability because a location's stock can be used to meet not only its own demand but also excess demand from other locations. The rewards of transshipments do not come without a cost.

The article focuses on a model of safety stock centralization entitled the portfolio effect. The purpose of this is to relax the two restrictive assumptions underlying the portfolio effect and to extend it to the centralization of safety stock from n locations to m locations. This allows for greater flexibility in analyzing the effects of changes in one or more specific variables. For example, the resulting model contains specifications of average demand and lead time service, including estimates of variance for each facility in the system, the proportion of safety stock that is moved from a decentralized facility to a centralized one, and the policies that establish a firm's exposure to a stockout. Use of the model allows the manager to measure the effects not only of various consolidation strategies but also of changes in safety stock strategy and lead time service. The process starts with the formulation of the portfolio effect as presented by W. Zinn, M. Levy, and D.J. Bowersox. This is expressed in terms of the ratio of total safety stock for all consolidated facilities to total safety stock for all non consolidated facilities.