Inventory management and loss in beer retailing

Timothy J. Richards, Stephen F. Hamilton

Research output: Contribution to journalArticlepeer-review

Abstract

Food waste, or loss, at the wholesale and retail levels accounts for some 40% of the total amount of supply-chain waste. While zero waste is never optimal, there are managerial variables that contribute to the level of loss. In this paper, we use data from a large beverage distributor to estimate the most important causes of loss, and investigate which can be controlled in an economically-viable way. Controlling for a range of important environmental (uncontrollable) variables, we find that competitive pricing, case sets, assortment size, package size, and inefficiency are the most important determinants of loss. However, our most important finding highlights the importance of “discretion over rules” in inventory management as salesforce discretion in delivering less-than-ordered amounts is statistically important and one of the only ways management can directly influence supply-chain loss. Our findings contribute to the growing literature on food and beverage supply-chain sustainability, food loss and waste, and inventory management. As such, our findings are likely to be of interest to both managers in the food and beverage supply chain (manufacturers, distributors, and retailers) and policy makers interested in reducing food and beverage loss and improving food system sustainability. [EconLit Citations: D43, L13, M31].

Original languageEnglish (US)
JournalAgribusiness
DOIs
StateAccepted/In press - 2022

Keywords

  • beverages
  • distribution
  • food waste
  • inventory management
  • sustainability

ASJC Scopus subject areas

  • Food Science
  • Geography, Planning and Development
  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics

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