The credibility of a supplier as a reliable brand is a huge differentiator in today's competitive world. To set service levels, firms must understand how changes in service affect customer demand. Supply learning is a process whereby customers use past supplier performance to build beliefs about supplier capabilities and hence about future supplier performance
. Dual sourcing and inventory are two prevalent and widely studied strategies firms use to manage yield risk. A pervasive but implicit assumption in the literature is that a firm knows its suppliers' yield distributions with certainty. This is a strong assumption in many circumstances. A firm is more likely to have a forecast of a supplier's yield distribution and to update that forecast based on its experiences with the supplier.
"Supply learning" is the process by which customers predict a company's ability to fulfill product orders in the future using information about how well the company fulfilled orders in the past. A new paper investigates how and whether a customer's assumptions about future supplier performance will affect the likelihood that the customer will order from that supplier in the future.
Research, based on data from apparel manufacturer Hugo Boss. Key concepts include: Two key measures of supplier performance include "consistency", which is the likelihood that a company will continue to keep items in stock and meet demand, and "recovery", which is the likelihood that a company will deliver on time in spite of past stock-outs. Improvements in consistency and recovery are associated with increases in orders from retail customers.
Increasing the level of service may lead to an increase in orders, even when the service level is already nearly perfect. Obviously to fulfill the expectations of random customer you have to be proactive steps to promote sustainable development.
. Dual sourcing and inventory are two prevalent and widely studied strategies firms use to manage yield risk. A pervasive but implicit assumption in the literature is that a firm knows its suppliers' yield distributions with certainty. This is a strong assumption in many circumstances. A firm is more likely to have a forecast of a supplier's yield distribution and to update that forecast based on its experiences with the supplier.
"Supply learning" is the process by which customers predict a company's ability to fulfill product orders in the future using information about how well the company fulfilled orders in the past. A new paper investigates how and whether a customer's assumptions about future supplier performance will affect the likelihood that the customer will order from that supplier in the future.
Research, based on data from apparel manufacturer Hugo Boss. Key concepts include: Two key measures of supplier performance include "consistency", which is the likelihood that a company will continue to keep items in stock and meet demand, and "recovery", which is the likelihood that a company will deliver on time in spite of past stock-outs. Improvements in consistency and recovery are associated with increases in orders from retail customers.
Increasing the level of service may lead to an increase in orders, even when the service level is already nearly perfect. Obviously to fulfill the expectations of random customer you have to be proactive steps to promote sustainable development.